ZoomInfo (ZI) Earnings Preview: What to Watch Before Q1 2025 Results

ZoomInfo's subscription business accounts for over 95% of the company's $1.2 billion annual revenue, but it's facing significant headwinds with subscription revenue declining 2.09% year-over-year in the most recent quarter.

If you're considering a position in ZI stock ahead of earnings, this preview will help you understand the key metrics, recent performance, and what analysts are watching.

Earnings Expectations

Wall Street expects ZoomInfo to report quarterly revenue of approximately $301.1 million, representing a 1.8% decrease year-over-year. Analysts are projecting earnings per share (EPS) of $0.17, down from $0.24 in the same period last year, marking a 29% decline.

These estimates reflect ongoing challenges in ZoomInfo's core subscription business, which has shown declining growth rates for several consecutive quarters.

Business Segments

ZoomInfo's revenue is predominantly driven by three segments:

• Subscription and Circulation: $300.4 million in the most recent quarter (13.04% growth)
• Email Verification Service: $2.6 million (13.04% growth)
• Other Services: $0.6 million (-40% decline)

By geography, ZoomInfo generated approximately 87% of its revenue from the United States in its last reported annual results, with international markets accounting for the remaining 13%.

Follow up on more detailed business metrics here

Recent Stock Performance

ZoomInfo stock is currently trading at $9.30, showing mixed short-term momentum against longer-term weakness:

• 1-Week Return: +3.33%
• 1-Month Return: +8.64%
• 3-Month Return: -7.00%
• 6-Month Return: -22.44%
• 1-Year Return: -26.07%

Access concise statistics and key financial ratios for ZoomInfo – view them here.

Technical & Momentum Indicators

Technical indicators for ZI show mixed signals:

• RSI (14): 55.72 - Neutral territory
• StochRSI: 91.90 - Overbought conditions
• Money Flow Index: 67.55 - Moderately positive money flow
• CCI: 129.43 - Strong positive momentum

ZI is currently trading above its 20-day moving averages (SMA: $8.45, EMA: $8.81) but below longer-term moving averages (200-day SMA: $10.17, 200-day EMA: $10.17), indicating short-term bullish momentum within a longer-term bearish trend.

Options Activity

Options data shows mixed institutional sentiment toward ZoomInfo:

• Total Premium: $81,916
• IV Rank: 51.27 - Moderate implied volatility
• IV30: 0.83 - Elevated volatility expectations ahead of earnings
• Call/Put Volume: 732/375 (1.95 ratio) - Bullish bias
• Put-Call Ratio: 0.51 - Moderately bullish sentiment
• Open Interest: 142,055 contracts
• Change in OI: -31 contracts

The options data suggests institutional investors are cautiously optimistic heading into earnings, with call volume nearly double put volume.

Access real-time options chains and key derivatives data for ZoomInfo – explore them here.

Short Interest

Short interest in ZI is moderately elevated:

• Short Float: 6.19%
• Shares Short: 19,086,775
• Percentage of Shares Outstanding: 5.64%
• Fail-to-Deliver Shares: 693
• Relative FTD: 0.01%

While short interest isn't at extreme levels, it indicates some bearish sentiment among investors.

Access up-to-date short interest figures for ZoomInfo via Short Interest Data.

Analyst Ratings & Targets

Wall Street has adopted a cautious stance on ZoomInfo:

• Analyst Ratings: 18 analysts covering the stock
• Overall Rating: Hold
• Average Price Target: $9.00 (3.2% downside from current price)
• Top Analyst View: Hold with $12.00 price target (29.03% upside)

The consensus among analysts suggests limited upside potential for ZI in the near term.

Access consensus analyst forecasts for ZoomInfo via Analyst Forecasts.

Valuation & Fundamentals

ZoomInfo's valuation metrics show mixed signals:

• P/E Ratio: 116.31 (trailing), 9.33 (forward)
• PEG Ratio: -1.86 (negative due to expected earnings decline)
• P/S Ratio: 3.13 (trailing), 2.0 (forward)
• P/B Ratio: 2.25
• Gross Margin: 84.37%
• Operating Margin: 8.02%
• Net Margin: 2.40%

The wide gap between trailing and forward P/E ratios indicates analysts expect significant earnings growth in the coming quarters despite recent challenges.

Access comprehensive fundamental data for ZoomInfo via Financials.

Cash Flow & Balance Sheet

ZoomInfo's financial health shows both strengths and concerns:

• Free Cash Flow: $301.1 million
• Operating Cash Flow: $369.4 million
• Cash & Equivalents: $139.9 million
• Current Ratio: 0.69 (below healthy threshold of 1.0)
• Debt/Equity Ratio: 0.82

While ZoomInfo generates strong free cash flow with a healthy 24.8% FCF margin, its current ratio below 1.0 raises some liquidity concerns in the short term.

Risks & Considerations

Investors should be aware of several key risk factors:

• Stock-Based Compensation Impact: 11.36% of revenue, which substantially impacts profitability
• Valuation Sensitivity: Forward P/E of 9.33 assumes significant earnings improvement
• Technical Overbought Risk: StochRSI at 91.90 indicates short-term overbought conditions
• 30-day VaR (95% confidence): -47.38%

The high stock-based compensation as a percentage of revenue represents a significant concern for investors focused on true cash profitability.

"ZoomInfo faces challenges in its core subscription business with declining growth rates, but maintains strong free cash flow generation capacity. The upcoming earnings report will be crucial for determining whether the recent stock momentum can continue." - Market Analysis

Bottom Line

ZoomInfo enters its earnings report with moderately positive short-term momentum but facing fundamental challenges in its core subscription business. The substantial gap between trailing and forward P/E ratios suggests the market is pricing in a significant earnings recovery.

Given the technical indicators showing short-term overbought conditions and analyst expectations set relatively low, ZI could experience a positive reaction if it shows any signs of stabilizing its subscription business. However, the risk of further downside remains if growth continues to deteriorate.

The most crucial metrics to watch will be subscription revenue growth/decline rates and forward guidance, as these will determine whether ZoomInfo can reverse its recent negative trends.

Happy Investing!