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ZoomInfo Technologies cut on genAI concerns, Fastly raised on improving competitive environment

Published 01/08/2024, 02:23 PM
Updated 01/08/2024, 02:25 PM
© Reuters.  ZoomInfo Technologies cut on genAI concerns, Fastly raised on improving competitive environment

RBC Capital lowered shares of ZoomInfo Technologies Inc. (ZI) to Underperform with a new price target of $14, down from $16 per share, and lifted Fastly, Inc. (NYSE:FSLY) to Sector Perform, with a new price target of $18, up from $12 per share in separate notes to clients on Monday.

Analysts said that with ZoomInfo shares up 50% off the November lows, they think the stock has gotten ahead of itself.

"Our downgrade is based on four key points, including: 1) competition is tough and may get even tougher; 2) longer-term genAI concerns; 3) potential margin pressure; and 4) macro pressures persisting," they explained.

Overall, RBC Capital views the shares as showing an unfavorable risk/reward.

Meanwhile, the Fastly upgrade is based on four key points: "1) solid execution under new CEO Todd Nightingale; 2) an improving competitive environment; 3) the business continues to diversify; and 4) edge computing is gaining acceptance."

RBC Capital believes FSLY's shares are now fairly valued.

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