ZoomInfo (ZI): A Low-Cost Stock with High-Growth Potential?
26min read Investors seeking opportunities in low-priced stocks often face a dilemma: which companies offer both affordability and the potential for sustained growth? zoominfo technologies inc. (NASDAQ: ZI), currently trading at $9.39 per share as of May 2025, presents an intriguing case. With a market capitalization hovering around $2.3 billion and a focus on AI-driven business intelligence solutions, the company’s valuation sits at a multi-year low. But is this undervaluation justified, or does it mask an underappreciated growth engine? Let’s dissect the data.
The Current Landscape: A Stock in Flux
ZoomInfo’s stock has been volatile in recent years, reflecting broader market shifts in the software sector. After peaking at over $30 in late 2021, ZI’s share price has declined steadily, a trend exacerbated by macroeconomic pressures and investor skepticism toward SaaS valuations. However, the company’s fundamentals remain intact. As of May 2025, ZoomInfo serves over 35,000 global clients, including heavyweights like Salesforce, Microsoft, and McKinsey, and its AI-powered platforms—such as ZoomInfo Copilot—have positioned it as a leader in go-to-market (GTM) solutions.
Ask Aime: Invest in ZoomInfo for growth at a low price?
Key Catalysts: Earnings and Product Innovation
The upcoming first-quarter 2025 earnings report on May 12 will be a critical test for ZoomInfo. Analysts are closely watching revenue growth and customer retention metrics. In 2024, the company reported a 19% year-over-year revenue increase, driven by its expanding product suite, including Talent (HR analytics) and Marketing (ad targeting). If Q1 2025 results align with these trends, the stock could see a rebound.
Ask Aime: "Should I buy ZoomInfo? Are stocks like ZoomInfo undervalued?"
ZoomInfo’s AI-first strategy is another key differentiator. Its platform processes over 2.3 billion business data points, offering clients real-time insights for sales, marketing, and talent acquisition. This capability has made ZoomInfo a go-to partner for enterprises digitizing their GTM processes—a $20 billion market expected to grow at 12% annually through 2030.
Technical and Fundamental Analysis: A Mixed Picture
ZoomInfo’s technical indicators paint a cautiously optimistic picture. As of May 9, its 50-day SMA ($9.64) and 200-day SMA ($10.17) are both above the current price, suggesting near-term resistance. However, the stock’s 14-day RSI of 54.36 signals neutral momentum, with neither overbought nor oversold conditions. Volatility, measured at 9.64%, remains moderate, and the Fear & Greed Index score of 39 (“Fear”) hints at underownership, which could fuel buying pressure if earnings exceed expectations.
On the valuation front, ZoomInfo trades at a trailing P/E of 15.6x—a discount to peers like Salesforce (23.4x) and HubSpot (26.7x). This compression reflects investor concerns over ZI’s heavy R&D spending and the SaaS sector’s post-pandemic slowdown. Yet, with a projected 2025 revenue growth rate of 18%, ZoomInfo’s PEG ratio (0.85) suggests it’s undervalued relative to its growth trajectory.
The Long-Term Case: Growth vs. Risks
Proponents argue that ZoomInfo’s long-term prospects hinge on two factors: scaling its AI platform and expanding into adjacent markets. The company’s Q1 2025 earnings could provide clarity on both. For instance, if ZoomInfo Copilot—a generative AI tool for sales teams—delivers strong adoption rates, it could accelerate revenue growth. Meanwhile, its entry into enterprise marketing analytics and HR tech opens new revenue streams.
The bullish outlook is supported by forecasts: analysts predict ZI’s stock could reach $11.52 by late 2025, implying a 46% return from its May 9 price. Even more aggressively, some models suggest a high of $13.68 by year-end 2025. These targets are ambitious but plausible if ZoomInfo can execute on its product roadmap.
Risks to Consider
Critics highlight several risks. First, the SaaS sector remains crowded, with competitors like LinkedIn Sales Navigator and Gong.io vying for market share. Second, ZoomInfo’s heavy reliance on enterprise clients exposes it to macroeconomic slowdowns, as businesses cut discretionary spending. Lastly, the stock’s current valuation assumes a full recovery in investor sentiment—a tall order in a market still wary of high-growth tech stocks.
Conclusion: A High-Reward, High-Risk Opportunity
ZoomInfo (ZI) is a compelling long-term play for investors willing to accept volatility. Its low price, robust client base, and AI-driven innovation align with the growing demand for enterprise intelligence tools. The upcoming earnings report will be a pivotal moment: a strong showing could catalyze a valuation rebound, while a miss might prolong the stock’s slump.
Key data points reinforce this thesis:
- Technical Edge: A 46% upside potential by late 2025 (per forecasts) versus current price.
- Market Position: 35,000+ clients and 19% YoY revenue growth in 2024.
- Valuation: PEG ratio of 0.85 suggests undervaluation relative to growth.
However, investors must weigh these positives against execution risks and sector headwinds. For a long-term portfolio, ZoomInfo offers an attractive risk/reward profile—provided one can stomach short-term swings. As the old adage goes, “Buy when there’s blood on the street”—ZoomInfo’s current price may just be the “blood” signaling a bottom.
