Shares of Zoom Video Communications Inc. shot higher in active trading Thursday, after the KeyBanc analyst Steve Enders turned bullish for the first time, as he sees the videoconferencing company benefiting from the new normal of a hybrid work state.

The stock
ZM,
+4.94%

rose as much as 7.4% to an intraday high of $396.89, before paring gains to be up 4.6% in afternoon trading. Volume swelled to 4.8 million shares, compared with the full-day average of about 2.75 million shares over the past 30 days.

KeyBanc’s Enders raised his rating to overweight, after being at sector weight since May 2019, which was a month after the stock went public. He introduced a $428 stock price target, which was about 11% above current levels.

“We view the proliferation of video as a real and lasting phenomenon, with the pandemic forcing society to push through adoption hurdles and embrace new technologies,” Enders wrote in a note to clients.

The upgrade comes on the heels of a KeyBanc survey of information-technology executives and value-added resellers (VARs), which indicated demand for on-premise infrastructure projects looks set to remain strong at least into next year.

Enders also pointed to a positive outlook on Zoom’s deal to buy Five9 Inc.
FIVN,
+4.89%
,
which he believes will help Zoom evolve into a broader communications platform.

“Our recent CIO survey suggests enterprise adoption of video platforms will continue into [calendar year 2022] as business return to office environments with 97% of respondents maintaining or increasing their spend,” Enders wrote. “We see this as a natural consequence of a future hybrid work state with CIOs expecting ~40% of employees to [work from home] routinely in the long term.”

Zoom’s stock has rallied 20.4% over the past three months, while the S&P 500 index
SPX,
+0.63%

has gained 5.2%. Over the past 12 months, Zoom shares have run up 53.2% while the S&P 500 has advanced 35.9%.

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