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ZM heads into its November 23 earnings date with options traders at their most bullish in a year, even as short sellers quietly reduce exposure and the lending market remains one of the loosest in the software space.
The clearest signal this week is in options. The put/call ratio has dropped to 0.45, nearly 1.6 standard deviations below its 20-day average of 0.48, and is now brushing against its 52-week low of 0.44. That is a notable tilt toward calls. The shift has been gradual but consistent. A month ago the ratio sat closer to 0.52, and the persistent drift lower through October suggests investors are not just hedging less but actively reaching for upside exposure ahead of the print. The 52-week high PCR of 0.80 reflects how different the mood was at the extremes of the past year.
Short positioning offers little resistance to that bullish lean. At 2.3% of free float, short interest is low and falling, down roughly 10% over the past week after a cluster of covering around October 8. The borrow market confirms the lack of conviction: cost to borrow has edged up to 0.53% from about 0.27% a week ago, a 30% rise in percentage terms but still a trivially cheap rate in absolute terms. Availability is essentially unconstrained, with roughly 172 million shares available to lend against fewer than 6.3 million sold short, providing no squeeze pressure whatsoever. The ORTEX short score has drifted lower to 31.3 this week, consistent with a stock where short-side conviction is fading rather than building.
The Street is divided on whether the stock deserves more credit. Bulls point to enterprise momentum: revenue up 4.9% with the enterprise segment growing 7.8%, its best pace in three years, AI feature adoption up 125% year-on-year in licensed users, and RPO rising 14% to $4.5 billion. The mean analyst price target is $118, roughly 20% above the current price of $98.16, though the analyst data dates to late August and may not fully capture subsequent moves. RBC Capital holds an Outperform at $130, while Rosenblatt and Needham are also at $130 Buy. Morgan Stanley, sitting at Equal-Weight with a $107 target, and Cantor Fitzgerald at Neutral with $104 represent the more cautious view. The bear case is that margin pressure from AI investment is real, non-GAAP gross margin slipped to 79.1%, and online revenue growth has stalled near flat. Valuation is not stretched, the trailing PE is about 15.6 and EV/EBITDA near 9.2, but the forward EPS momentum factor scores in the 4th percentile, meaning estimate revisions have been heading the wrong way.
Ownership data adds some texture. Founder and CEO Eric Yuan holds 7.1% of shares as the largest single holder. BlackRock added roughly 240,000 shares through September 30, bringing its position to 6.2%. FMR added 600,000 shares over the same period, and Geode added around 884,000, both consistent with passive rebalancing following price appreciation. On the insider side, the activity this week is less meaningful than it first appears: CEO Yuan exercised options on October 9 and withheld shares for tax, both standard compensation mechanics rather than a discretionary market signal. The CFO and engineering president both sold shares this week, all under pre-arranged 10b5-1 plans. The 90-day net insider position is negative at roughly -107,000 shares, but given the planned nature of the sales and the absence of any open-market purchases, the signal is weak.
The last earnings print is the one to hold in mind. When ZM reported F2Q27 results on August 25, the stock fell 10.5% the next day and extended the loss to roughly 9.5% over the following five days, a punishing reaction despite what management described as a solid quarter. Investors focused on the online segment stagnation and the guidance signal of flat full-year growth. The November 23 print will land with the stock 4% higher than its pre-August levels, options traders leaning bullish, and short sellers largely absent. The question is whether the enterprise acceleration story has built enough momentum to shift investor focus away from the online drag.
What to watch next: whether enterprise RPO and AI-feature monetisation metrics in the Q3 update are enough to move analyst estimates back toward positive momentum, and whether the put/call ratio holds near its 52-week low as the earnings date approaches.
See the live data behind this article on ORTEX.
Open ZM on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data and reviewed by the ORTEX team. Content is informational only and does not constitute investment advice.
