Stocks To Buy And Watch: ZoomInfo
Vancouver, Wash.-based ZoomInfo offers online services that provide contact and account data for sales and marketing teams, recruiters and others. In addition to the database of potential business clients, ZoomInfo provides artificial intelligence tools that help identify ideal customer profiles.
In the most recent quarter, reported on Aug. 2, ZoomInfo earned 14 cents per share on revenue of $174 million. Year over year, earnings and sales jumped 100% and 57%, respectively. The results were on par with the past several quarters.
“ZoomInfo delivered another record quarter, including the highest levels ever for both retention activity and customer engagement, and accelerating revenue growth …,” said CEO Henry Schuck in a Q2 news release. “ZoomInfo is the only company delivering a modern go-to-market platform that brings together best-in-class intelligence with comprehensive data management, workflow and engagement software.”
The company debuted on June 4, 2020 on the Nasdaq, pricing at 21 per share. On the first day of trade, the stock surged nearly 62% above the IPO price, indicating huge institutional demand. However, since then, the stock has had little upward movement.
Stocks with outstanding sales and profit growth like ZoomInfo should perform better.
Since going public, ZoomInfo has completed three secondary offerings, the latest of which occurred on Aug. 9. The company said that no shares are being sold by ZoomInfo, although the extra supply of shares on the open market from large institutional holders could be weighing the stock price down.
IBD reached out to several analysts who cover the company about the chances of further share offerings, but none had responded by Tuesday afternoon.
Software Leader’s IBD Stock Ratings
ZoomInfo ranks No. 32 in the IBD 50. (The IBD 50 is a list of leading growth stocks with strong relative price strength and top-notch fundamentals.) The top growth company was also featured in this week’s Stocks Near A Buy Zone column.
The stock shows a modest 65 Earnings Per Share Rating, of a best-possible 99, but a strong A SMR Rating, according to IBD Stock Checkup. The EPS Rating tracks a company’s short- and long-term earnings performance. The SMR Rating analyzes a company’s sales, margins and return on equity, and offers a letter grade from A+ (the best) to E (the worst).
IBD Stock Checkup also shows that ZI stock offers a strong 98 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.
ZoomInfo Stock Tops New Buy Point
ZoomInfo stock is trying to break out past a 67.73 buy point in a flat base, according to IBD MarketSmith chart analysis. The latest buy point comes on the heels of a successful breakout above a cup-with-handle’s 54.34 buy point. The 5% buy area tops out at 71.12. The two patterns combine to form a bullish base-on-base formation.
The stock’s relative strength line is making new highs. An RS line at new highs on the breakout confirms the stock as a stock market leader. The RS line measures a stock’s price performance vs. the S&P 500 and is the blue line on IBD Charts.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the stock market.
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