ZoomInfo Technologies finds critical support amid broad market decline
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Sales reps are always looking for ways to get more leads, faster, and business data providers ZoomInfo Technologies (NASDAQ: ZI) helps to speed up this process.
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The share lost 9.18% in the wake of the broad market decline. No need to panic right now, with roughly three-quarters of stocks following the direction of the market at any point in time, and a lot of growth stocks have been hammered last week.
Remember, whenever the market or a single stock pulls back after a strong rally, headline writers often attribute the sell-off to a news event. In this case, the Omricon variant of the Covid-19 virus is to blame. But it’s also possible that investors will want to take some profits off the table after the big rallies this year, especially if the year-end tax rulings are imminent.
ZoomInfo went public in June 2020 as the first technology IPO after the Covid bans last year. It rose over 60% on its first day of trading, demonstrating investor enthusiasm for subscription software makers, a high-growth category whose promise was shown after orders from home.
ZoomInfo helps corporate users to integrate their sales and marketing data with cloud-based systems from Microsoft, Oracle and Salesforce, among others.
The Vancouver, Washington-based company has a market capitalization of $ 27.85 billion, testament to its rallies over the past few months and successful initial public offering.
The stock is up 1.26% last month, 13.47% over the past three months and 45.16% year-to-date.
Shares closed at $ 70.01 on Friday, down $ 0.77, or 1.09% for the session.
Increase in the annual contract value
When the company reported its third quarter on Nov. 1, founder and CEO Henry Schuck said the company closed the quarter with more than 25,000 customers, with more than 1,250 customers with annual contract value of more than $ 100,000. “The number of customers with more than $ 100,000 in ACV is up more than 70% year-over-year,” he said.
ZoomInfo increased earnings 18% to $ 0.13 per share, beating views by a cent. Revenue was $ 197.6 million, up 60%, according to MarketBeat earnings data, also exceeding analysts’ expectations. The company said 54% of that revenue came from organic growth.
In the conference call, CFO Cameron Hyzer addressed the customer base.
“Customers with ACV greater than $ 100,000 now represent more than 40% of our subscription revenue, and the ACV contributed by these customers is up more than 85% compared to Q3 2020,” said Hyzer.
Hyzer added that adjusted operating income was $ 78 million for the third quarter. “This exceeded our forecast of $ 72 million to $ 74 million in revenue for an adjusted operating profit margin of 39%. The low margin performance combined with organic sales growth of 54% is in line with the growth and profitability framework we set on our most recent Analyst Day, ”he said.
The company increased its full-year revenue forecast to $ 731 million to $ 733 million, from a previous forecast of $ 703 million to $ 707 million. ZoomInfo’s earnings guidance for the full year has been raised one cent to $ 0.51-0.52 per share.
Moves in tandem with a wider market
The ZoomInfo share has performed roughly parallel to the broader market in the last few sessions. The stock rebounded to a new high of $ 79.17 on November 19 as the market began to experience choppy trading.
Despite last week’s big pullback, the stock found support above its 50-day moving average, a good sign that institutions have not (yet) decided to bail out. Of course, if the broad market decline continues, that could change if ZoomInfo joins the downtrend.
At this point, with the decline in both the stock and the broader market, it is not time to risk a buy. However, the promising future of the company bodes well for a future purchase. Look out for a signal such as a trend line or a rise in price that will clear a sample buy point. In addition, it is preferable if the broader market is also trending up; This is additional insurance that institutional buyers want to buy for their portfolios. 