ZoomInfo's Strategic Turnaround and Valuation Upside in 2026: A Re-Rating Story Unfolds

In the ever-evolving landscape of enterprise software, ZoomInfo Technologies Inc. (GTM) has emerged as a compelling case study in strategic reinvention. As 2026 approaches, the company's recent financial performance, coupled with a shifting competitive environment, has sparked renewed investor interest in its re-rating potential. With record revenue, margin expansion, and a clear pivot toward high-value clients, ZoomInfo appears to be laying the groundwork for a valuation leap-a narrative supported by both its operational execution and analyst sentiment.

A Strategic Shift to Upmarket: Fueling Sustainable Growth

ZoomInfo's third-quarter 2025 results underscored a deliberate and successful pivot toward larger, more profitable clients. The company reported record GAAP revenue of $318.0 million, a 5% year-over-year increase, with adjusted operating income surging to $117.7 million-a 37% margin, the highest since 2024. This margin expansion was driven by a strategic realignment: upmarket Annual Contract Value (ACV) now accounts for 73% of total ACV, a 10-percentage-point increase over two years. By focusing on enterprise clients, ZoomInfo has not only improved its pricing power but also strengthened customer retention, with net revenue retention climbing to 90% in Q3 and upmarket in-period retention exceeding 100%.

This shift is more than a short-term tactic-it reflects a long-term vision. As stated by ZoomInfo's management, the company is "redefining its value proposition through AI-driven tools that cater to the complex needs of enterprise sales and marketing teams." The launch of the ZoomInfo GTM Workspace, an AI-powered execution engine, exemplifies this strategy. Early results from Copilot renewals, which saw a mid- to high-single-digit percentage uplift compared to initial renewals, suggest that these innovations are resonating with customers.

Easing Competitive Pressures and Analyst Optimism

ZoomInfo's competitive landscape has also shown signs of softening, a critical factor in its re-rating potential. KeyBanc Capital Markets upgraded the stock from Underweight to Sector Weight in late 2025, citing "easing pressure from down-market segments and private competitors" as a key driver. This upgrade was mirrored by revised price targets from major institutions: Barclays raised its target to $14, while Citi increased it to $13, reflecting growing confidence in ZoomInfo's ability to execute its upmarket strategy.

The company's AI-driven product roadmap further insulates it from competition. Tools like the AI Builder Catalog and Copilot Workspace are not just incremental improvements-they represent a fundamental reimagining of how sales teams interact with data. As one analyst noted, "ZoomInfo is no longer just a data provider; it's a workflow platform that integrates AI into every stage of the sales lifecycle." This differentiation is critical in a market where competitors like Salesforce and HubSpot are still grappling with fragmented AI implementations.

Financial Execution and 2026 Outlook

ZoomInfo's ability to consistently exceed guidance has been a cornerstone of its recent success. The company's Q3 share repurchases of 8.3 million shares for $86.6 million signaled management's confidence in its cash flow generation, while its adjusted operating margin of 37% demonstrated disciplined cost management. These factors, combined with a 20% year-over-year growth in operations suite revenue, position ZoomInfo to meet-and potentially exceed-2026 forecasts.

Analysts project revenues of $1.26 billion in 2026, with earnings per share expected to rise by 58% to $0.53. Such growth would not only validate ZoomInfo's strategic pivot but also justify a multiple expansion. At current valuations, the stock trades at a discount to peers like Datadog and Snowflake, both of which have seen significant re-ratings following similar strategic overhauls.

Caution and the Path Forward

While the case for a re-rating is strong, skeptics remain. Goldman Sachs and Bank of America have maintained cautious stances, emphasizing the need for "robust revenue acceleration and margin improvements" before a valuation leap becomes justified. However, ZoomInfo's Q3 results-particularly its upmarket retention rates and AI-driven product momentum-suggest that the company is already addressing these concerns.

For investors, the key takeaway is clear: ZoomInfo's strategic turnaround is no longer theoretical. With a high-margin business model, a defensible upmarket position, and a product roadmap anchored in AI, the company is well-positioned to deliver both earnings growth and a valuation re-rating in 2026. As the competitive landscape continues to shift in its favor, the question is no longer if ZoomInfo can re-rate-but how much it can re-rate.