Key insights
- ZoomInfo shares plummeted after a significant guidance cut and business model overhaul. Analysts downgraded the stock, citing elevated churn, weakening momentum, and AI-related disruption causing elongated sales cycles. Increased competition from private rivals also contributed to the negative sentiment. The company is restructuring and laying off 20% of its workforce.
Investing.com -- ZoomInfo Technologies shares have fallen 35% on Tuesday after the sales intelligence software company slashed its full-year revenue outlook and announced a sweeping business model overhaul, triggering a wave of analyst downgrades.
The company posted first-quarter earnings per share of $0.28, beating consensus by two cents, and revenue of $310.2 million, marginally ahead of estimates.
But the results were overshadowed by full-year 2026 revenue guidance, which was lowered to $1.185 billion to $1.205 billion, well below the $1.26 billion consensus, implying a revenue decline of roughly 4% against prior expectations for modest growth.
ZoomInfo also announced a restructuring that will eliminate approximately 600 positions, or around 20% of its workforce.
Piper Sandler analyst Billy Fitzsimmons downgraded the stock to Underweight with a price target of $4, calling the guidance revision a "material expectations reset" and citing elevated churn in the software customer vertical, weakening upmarket momentum and the added execution risk of transitioning to a consumption-based pricing model in the second half.
Canaccord analyst David Hynes Jr. also downgraded to Hold, noting that while the stock had previously appeared cheap, "cheap absent a catalyst is not a great place to position in software."
Stifel analyst J. Parker Lane cut the rating to Hold with a $4 target, pointing to AI-related disruption causing elongated sales cycles and paused purchasing decisions, particularly among software customers.
Meanwhile, BTIG analyst Allan Verkhovski downgraded to Neutral, flagging rising competitive pressure from private rivals Apollo and Clay, and warning that ZoomInfo is "unlikely to receive the benefit of the doubt on a return to durable growth" while disruption risks continue to mount.