ZoomInfo Technologies Inc. (ZI) was cut to Neutral from Buy at Goldman Sachs on Thursday, with the investment bank issuing a new price target of $17 per share for the stock, down from $30.
Analysts said that lower visibility into the timing of the company's hiring rebound and waning fundamentals are weighing on ZI's growth outlook. They also described the company's Q3 earnings as "mixed," adding that the company also posted soft forward guidance.
Analysts explained that a "rebound in tech hiring – a key pillar of our thesis – is taking longer than expected, with industry signals suggesting muted growth next year."
In addition, they noted that "the strength of key leading indicators continues to deteriorate, with customers >$100 in ACV contracting qoq, CRPO growth (-6% yoy) declining at a faster clip than RPO (-4%), and bad debt expense continuing to depress future earnings."
Goldman Sachs believes that with the company's large multi-year cohort up for renewal in the next two quarters and a depressed NRR, it "could lead to top-line growth taking longer than expected to inflect."
"With a wide range of possibilities for revenue growth (with potential for further downside revisions should the macro backdrop deteriorate further), we see a more balanced risk/reward at current share price levels," said the analysts.