NYSE:ZEN

Stock Analysis Report

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Market Cap

US$17.0b

Last Updated

2021/07/23 02:38 UTC

Data Sources

Company Financials +

Executive Summary

Zendesk, Inc., a software development company, provides software as a service solutions for organizations in North America, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. More Details


Snowflake Analysis

Adequate balance sheet with moderate growth potential.


Similar Companies

Share Price & News

How has Zendesk's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ZEN is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: ZEN's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

5.3%

ZEN

3.0%

US Software

0.4%

US Market


1 Year Return

50.9%

ZEN

40.9%

US Software

36.9%

US Market

Return vs Industry: ZEN exceeded the US Software industry which returned 34.5% over the past year.

Return vs Market: ZEN exceeded the US Market which returned 35.1% over the past year.


Shareholder returns

ZENIndustryMarket
7 Day5.3%3.0%0.4%
30 Day-1.2%4.9%1.6%
90 Day-3.0%8.5%2.7%
1 Year50.9%50.9%41.8%40.9%39.1%36.9%
3 Year136.9%136.9%139.9%133.4%61.0%51.0%
5 Year383.1%383.1%358.6%335.0%122.5%97.8%

Long-Term Price Volatility Vs. Market

How volatile is Zendesk's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Zendesk undervalued compared to its fair value and its price relative to the market?

16.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ZEN ($143.08) is trading below our estimate of fair value ($170.46)

Significantly Below Fair Value: ZEN is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ZEN is unprofitable, so we can't compare its PE Ratio to the US Software industry average.

PE vs Market: ZEN is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate ZEN's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: ZEN is overvalued based on its PB Ratio (39.4x) compared to the US Software industry average (7.1x).


Future Growth

How is Zendesk forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

39.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ZEN is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: ZEN is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: ZEN is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: ZEN's revenue (20% per year) is forecast to grow faster than the US market (9.3% per year).

High Growth Revenue: ZEN's revenue (20% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ZEN's Return on Equity is forecast to be high in 3 years time (31.6%)


Past Performance

How has Zendesk performed over the past 5 years?

-18.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ZEN is currently unprofitable.

Growing Profit Margin: ZEN is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: ZEN is unprofitable, and losses have increased over the past 5 years at a rate of 18.5% per year.

Accelerating Growth: Unable to compare ZEN's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: ZEN is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (33.3%).


Return on Equity

High ROE: ZEN has a negative Return on Equity (-52.15%), as it is currently unprofitable.


Financial Health

How is Zendesk's financial position?


Financial Position Analysis

Short Term Liabilities: ZEN's short term assets ($1.2B) exceed its short term liabilities ($709.5M).

Long Term Liabilities: ZEN's short term assets ($1.2B) exceed its long term liabilities ($1.0B).


Debt to Equity History and Analysis

Debt Level: ZEN's debt to equity ratio (251.1%) is considered high.

Reducing Debt: Insufficient data to determine if ZEN's debt to equity ratio has reduced over the past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable ZEN has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: ZEN is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 23.6% per year.


Dividend

What is Zendesk current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate ZEN's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate ZEN's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ZEN's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ZEN's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ZEN's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.1yrs

Average management tenure


CEO

Mikkel Svane (50 yo)

13.92yrs

Tenure

US$6,489,330

Compensation

Mr. Mikkel Asger Svane has been Independent Director at Stitch Fix, Inc. Since October 16, 2018. Mr. Svane founded Zendesk, Inc. in 2007 and has been its Chief Executive Officer since August 2007. Mr. Svan...


CEO Compensation Analysis

Compensation vs Market: Mikkel's total compensation ($USD6.49M) is below average for companies of similar size in the US market ($USD11.26M).

Compensation vs Earnings: Mikkel's compensation has increased whilst the company is unprofitable.


Leadership Team

Experienced Management: ZEN's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.


Board Members

Experienced Board: ZEN's board of directors are not considered experienced ( 2.5 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: ZEN insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.1%.


Top Shareholders

Company Information

Zendesk, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Zendesk, Inc.
  • Ticker: ZEN
  • Exchange: NYSE
  • Founded: 2007
  • Industry: Application Software
  • Sector: Software
  • Market Cap: US$16.976b
  • Shares outstanding: 118.65m
  • Website: https://www.zendesk.com

Number of Employees


Location

  • Zendesk, Inc.
  • 989 Market Street
  • San Francisco
  • California
  • 94103
  • United States

Listings


Biography

Zendesk, Inc., a software development company, provides software as a service solutions for organizations in North America, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. Its flagshi...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/07/23 02:38
End of Day Share Price2021/07/22 00:00
Earnings2021/03/31
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.