10:44 AM EST, 11/25/2025 (MT Newswires) -- Zoom Communications' ( ZM ) Q3 beat and fiscal 2026 guidance raise reflect solid execution, a steady core, and momentum across phone, customer experience, Workvivo, and AI offerings, Morgan Stanley said in a Tuesday note.

Topline upside, margin outperformance, and discipline in operating expenditure drove Q3 operating income beat, analysts said. The company's AI investments are also adding to the company's operating leverage, analysts wrote.

Zoom's online segment outperformed expectations, while enterprise churn improved in Q3, analysts wrote. Valuation is "undemanding" and implies limited downside risk, according to the note.

The brokerage said it increased its topline growth forecast by around 1% for fiscal 2027 and 2028. Analysts also raised their operating income and earnings forecast by low-to-mid single digits.

The brokerage reiterated its equalweight rating on the stock and raised its price target to $92 from $85.

Shares of Zoom rose 12% in recent trading.

Price: 86.94, Change: +8.34, Percent Change: +10.61