ZI

Why ZoomInfo Technologies Stock Soared Today

Shares of ZoomInfo (NASDAQ: ZI) soared 14.4% on Tuesday after the business data platform provider announced strong quarterly results.

Zoominfo's fourth-quarter 2023 revenue grew 5% year over year to $316.4 million, translating to non-GAAP (adjusted) net income of $0.26 per share. Analysts, on average, were only modeling earnings of $0.25 per share on slightly lower revenue.

ZoomInfo leans into its AI advantage

ZoomInfo Founder and CEO Henry Schuck noted that the company remains comfortably cash-flow positive, delivering unlevered free cash flow of $126 million during the quarter. Schuck also highlighted ZoomInfo's recent introduction of ZoomInfo Copilot, its generative AI-powered solution that provides recommendations to users for who to contact, when to engage them, and even what to say across different channels.

Meanwhile, ZoomInfo's net revenue retention for the full year arrived at 87%, contracting from 104% in 2022. Many customers have certainly tightened their purse strings of late, but ZoomInfo seems to be doing well at controlling the factors within its control as it pertains to its value proposition. According to a recent survey of over 7,000 users, ZoomInfo customers bring in 32% more revenue, on average, by closing more deals than they did prior to using the platform.

What's next for ZoomInfo stock?

For the full year 2024, ZoomInfo issued guidance calling for revenue of $1.26 billion to $1.28 billion -- roughly in line with expectations and up a modest 2.5% year over year at the midpoint -- with adjusted earnings per share of $0.99 to $1.01. Most analysts were modeling full-year 2024 earnings near the lower end of ZoomInfo's outlook range.

In the end, this slightly better-than-expected quarterly update might not drop any jaws in the bear camp. But with shares of ZoomInfo still down around 32% over the past year, even after today's pop, it's no surprise to see some bullish investors stepping back in today.

Should you invest $1,000 in ZoomInfo Technologies right now?

Before you buy stock in ZoomInfo Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and ZoomInfo Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

*Stock Advisor returns as of February 12, 2024

Steve Symington has positions in ZoomInfo Technologies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.