Zoom Delivers Steady Results, but Guides Slightly Lower; FVE Down to $95

Narrow-moat Zoom reported solid results for its fiscal third quarter, featuring revenue slightly above the top end of guidance with meaningfully better profitability. However, it provided guidance that was slightly lower than our model for the fourth quarter. Enterprise strength continues to be overshadowed by online weakness, while currency headwinds worsened, consistent with most of our software coverage, and sales cycles continue to elongate. Considering guidance and our expectations that macro conditions worsen, we lowered our estimates meaningfully for fiscal 2024 and are lowering our fair value estimate to $95 per share, from $115. We continue to prefer our wide moat names during the prolonged software selloff.