Price Target Changed • Nov 16
Price target decreased to US$77.55 Down from US$91.50, the current price target is an average from 10 analysts. New target price is approximately in line with last closing price of US$76.62. The company is forecast to post a net loss per share of US$2.08 next year compared to a net loss per share of US$1.87 last year. Recent Insider Transactions Derivative • Nov 10
Founder exercised options and sold US$74k worth of stock On the 4th of November, Mikkel Svane exercised options to acquire 966 shares at no cost and sold these for an average price of US$76.31 per share. This trade did not impact their existing holding. For the year to December 2015, Mikkel's total compensation was 6% salary and 94% other compensation. This indicates that these sales could comprise a meaningful part of their income for the year. Since December 2021, Mikkel's direct individual holding has decreased from 846.40k shares to 504.92k. Company insiders have collectively sold US$39m more than they bought, via options and on-market transactions in the last 12 months. Reported Earnings • Oct 28
Third quarter 2022 earnings: EPS and revenues miss analyst expectations Third quarter 2022 results: US$0.48 loss per share (further deteriorated from US$0.45 loss in 3Q 2021). Revenue: US$416.9m (up 20% from 3Q 2021). Net loss: US$59.1m (loss widened 8.6% from 3Q 2021). Revenue missed analyst estimates by 2.0%. Earnings per share (EPS) also missed analyst estimates by 27%. Revenue is forecast to grow 19% p.a. on average during the next 3 years, compared to a 14% growth forecast for the Software industry in the US. Over the last 3 years on average, earnings per share has fallen by 14% per year but the company’s share price has increased by 2% per year, which means it is well ahead of earnings. Recent Insider Transactions Derivative • Oct 19
President of Worldwide Sales exercised options and sold US$204k worth of stock On the 17th of October, Norman Gennaro exercised 5k options at a strike price of around US$35.47 and sold these shares for an average price of US$76.36 per share. This trade did not impact their existing holding. Since December 2021, Norman's direct individual holding has decreased from 34.19k shares to 26.52k. Company insiders have collectively sold US$40m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • Sep 20
President of Worldwide Sales exercised options and sold US$205k worth of stock On the 16th of September, Norman Gennaro exercised 5k options at a strike price of around US$35.47 and sold these shares for an average price of US$76.55 per share. This trade did not impact their existing holding. Since December 2021, Norman's direct individual holding has decreased from 34.19k shares to 27.62k. Company insiders have collectively sold US$46m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • Aug 19
President of Worldwide Sales exercised options and sold US$204k worth of stock On the 16th of August, Norman Gennaro exercised 5k options at a strike price of around US$35.47 and sold these shares for an average price of US$76.31 per share. This trade did not impact their existing holding. Since September 2021, Norman's direct individual holding has decreased from 32.02k shares to 27.62k. Company insiders have collectively sold US$50m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • Aug 06
Chief Operating Officer exercised options and sold US$262k worth of stock On the 2nd of August, Jeffrey Titterton exercised 5k options at a strike price of around US$27.34 and sold these shares for an average price of US$75.25 per share. This trade did not impact their existing holding. Since September 2021, Jeffrey's direct individual holding has decreased from 17.65k shares to 0. Company insiders have collectively sold US$56m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions • Aug 06
Founder recently sold US$7.7m worth of stock On the 2nd of August, Mikkel Svane sold around 102k shares on-market at roughly US$75.28 per share. This was the largest sale by an insider in the last 3 months. This was Mikkel's only on-market trade for the last 12 months. Reported Earnings • Jul 29
Second quarter 2022 earnings: EPS misses analyst expectations Second quarter 2022 results: US$0.77 loss per share (down from US$0.49 loss in 2Q 2021). Revenue: US$407.2m (up 28% from 2Q 2021). Net loss: US$95.1m (loss widened 63% from 2Q 2021). Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 56%. Over the next year, revenue is forecast to grow 24%, compared to a 20% growth forecast for the industry in the US. Over the last 3 years on average, earnings per share has fallen by 13% per year but the company’s share price has only fallen by 2% per year, which means it has not declined as severely as earnings. Recent Insider Transactions Derivative • Jul 20
President of Worldwide Sales exercised options and sold US$198k worth of stock On the 19th of July, Norman Gennaro exercised 5k options at a strike price of around US$35.47 and sold these shares for an average price of US$75.00 per share. This trade did not impact their existing holding. Since September 2021, Norman's direct individual holding has decreased from 32.02k shares to 29.81k. Company insiders have collectively sold US$48m more than they bought, via options and on-market transactions in the last 12 months. Seeking Alpha • Jul 08
What Is Zendesk Stock's Outlook After Acquisition? Zendesk stock will be acquired for $77.50 per share.
The company had previously rejected an offer of around $127 per share.
The company is still growing at a strong 30% rate.
The stock ironically looks more attractive if the deal falls apart.
Zendesk (ZEN) does want to get acquired after all. After declining a takeout offer of around $127 per share earlier in the year, ZEN has agreed to be acquired for $77.50 per share. The discrepancy does need to be taken into context - tech stocks overall have been thrashed since February. In this report, I look at the company's key metrics and discuss what shareholders can look forward to moving forward.
ZEN Stock Price
ZEN peaked above $150 per share, rejected a takeout offer rumored to be between $127 and $132 per share in February, and crashed as low as $54 per share.
Data by YCharts
The stock has since traded up very close to the $77.50 per share acquisition price.
ZEN Stock Key Metrics
ZEN has been a consistent grower in the enterprise space, with revenues growing 30% in the latest quarter. While ZEN is not yet profitable on a non-GAAP basis, it has generated non-GAAP profits including a 5.2% non-GAAP operating margin in the latest quarter.
ZEN has guided for the next quarter to see 30% revenue growth and for the full year to see up to 27.7% revenue growth.
ZEN has been able to power its consistent growth through impressive net expansion rates that stood at 121% in the latest quarter.
2022 Q1 Shareholder Letter
ZEN had $1.6 billion of cash and marketable securities versus $1.1 billion of convertible notes. The convertible notes mature in 2025, carry a 0.625% interest rate, and are convertible at a price of $164.17 per share (net of capped call transactions). The low interest cost of the debt plus the overall net cash position highlight the strong balance sheet position.
Who Acquired Zendesk?
On June 24, 2022, ZEN announced that it was being acquired by an investor group led by Permira and Hellman & Friedman LLC ("H&F") in an all-cash transaction valued at $10.2 billion - equating to a purchase price of $77.50 per share. That deal represented a 34% premium to where ZEN traded the day prior to the announcement.
How Will Acquisition Impact ZEN Investors?
If the deal is completed, then ZEN shareholders stand to receive $77.50 per share in cash. With the stock currently trading around $74.71 per share, shareholders might be able to earn a 3.7% return if held through completion. ZEN shareholders still need to vote on the deal, which some might feel has some chance of losing approval due to the fact that the company previously had an offer in the $127 range. But that offer was in February, and since then, many other tech stocks besides ZEN have fallen by a large magnitude as well.
What Is The Future Of Zendesk?
I see two paths forward for the stock. The more obvious path is for shareholders to approve the deal - at around 5.5x sales, the purchase price looks reasonable considering where other tech names trade. Recent Insider Transactions Derivative • Jun 29
President of Worldwide Sales exercised options and sold US$200k worth of stock On the 24th of June, Norman Gennaro exercised 5k options at a strike price of around US$35.47 and sold these shares for an average price of US$75.50 per share. This trade did not impact their existing holding. Since September 2021, Norman's direct individual holding has decreased from 32.02k shares to 31.81k. Company insiders have collectively sold US$54m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • Jun 18
Board Member exercised options and sold US$57k worth of stock On the 15th of June, Michael Curtis exercised options to acquire 1k shares at no cost and sold these for an average price of US$57.01 per share. This trade did not impact their existing holding. Since September 2021, Michael's direct individual holding has increased from 6.84k shares to 12.72k. Company insiders have collectively sold US$54m more than they bought, via options and on-market transactions in the last 12 months. Price Target Changed • Jun 13
Price target decreased to US$129 Down from US$140, the current price target is an average from 19 analysts. New target price is 116% above last closing price of US$59.96. Stock is down 57% over the past year. The company is forecast to post a net loss per share of US$1.75 next year compared to a net loss per share of US$1.87 last year. Buying Opportunity • Jun 13
Now 20% undervalued after recent price drop Over the last 90 days, the stock is down 46%. The fair value is estimated to be US$75.42, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 25% over the last 3 years. Earnings per share has declined by 12%. Revenue is forecast to grow by 57% in 2 years. Earnings is forecast to grow by 26% in the next 2 years. Recent Insider Transactions Derivative • May 10
Chief Technology Officer notifies of intention to sell stock Adrian McDermott intends to sell 10k shares in the next 90 days after lodging an Intent To Sell Form on the 2nd of May. If the sale is conducted around the recent share price of US$120, it would amount to US$1.2m. Since June 2021, Adrian's direct individual holding has increased from 86.16k shares to 92.76k. Company insiders have collectively sold US$66m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • Feb 03
Chief Technology Officer exercised options and sold US$877k worth of stock On the 1st of February, Adrian McDermott exercised 10k options at a strike price of around US$6.24 and sold these shares for an average price of US$96.40 per share. This trade did not impact their existing holding. Since March 2021, Adrian's direct individual holding has increased from 84.37k shares to 90.52k. Company insiders have collectively sold US$83m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • Feb 03
Chief Technology Officer exercised options and sold US$877k worth of stock On the 1st of February, Adrian McDermott exercised 10k options at a strike price of around US$6.24 and sold these shares for an average price of US$96.40 per share. This trade did not impact their existing holding. Since March 2021, Adrian's direct individual holding has increased from 84.37k shares to 90.52k. Company insiders have collectively sold US$83m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • Jan 23
Founder exercised options and sold US$3.9m worth of stock On the 18th of January, Mikkel Svane exercised 44k options at a strike price of around US$9.52 and sold these shares for an average price of US$97.70 per share. This trade did not impact their existing holding. For the year to December 2020, Mikkel's total compensation was 8% salary and 92% other compensation. This indicates that these sales could comprise a meaningful part of their income for the year. Since March 2021, Mikkel's direct individual holding has increased from 837.11k shares to 846.40k. Company insiders have collectively sold US$83m more than they bought, via options and on-market transactions in the last 12 months. Breakeven Date Change • Jan 02
Forecast to breakeven in 2024 The 16 analysts covering Zendesk expect the company to break even for the first time. New consensus forecast suggests the company will make a profit of US$5.00m in 2024. Average annual earnings growth of 38% is required to achieve expected profit on schedule. Recent Insider Transactions Derivative • Dec 18
Founder exercised options and sold US$3.9m worth of stock On the 15th of December, Mikkel Svane exercised 44k options at a strike price of around US$9.52 and sold these shares for an average price of US$98.61 per share. This trade did not impact their existing holding. For the year to December 2020, Mikkel's total compensation was 8% salary and 92% other compensation. This indicates that these sales could comprise a meaningful part of their income for the year. Since March 2021, Mikkel's direct individual holding has increased from 837.11k shares to 845.08k. Company insiders have collectively sold US$81m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • Nov 20
Founder notifies of intention to sell stock Mikkel Svane intends to sell 132k shares in the next 90 days after lodging an Intent To Sell Form on the 15th of November. If the sale is conducted around the recent share price of US$104, it would amount to US$14m. For the year to December 2020, Mikkel's total compensation was 8% salary and 92% other compensation. This indicates that these sales could comprise a meaningful part of their income for the year. Since December 2020, Mikkel's direct individual holding has decreased from 921.04k shares to 843.76k. Company insiders have collectively sold US$82m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • Nov 05
Chief Technology Officer exercised options and sold US$912k worth of stock On the 1st of November, Adrian McDermott exercised 9k options at a strike price of around US$6.24 and sold these shares for an average price of US$104 per share. This trade did not impact their existing holding. Since December 2020, Adrian's direct individual holding has increased from 82.42k shares to 88.67k. Company insiders have collectively sold US$79m more than they bought, via options and on-market transactions in the last 12 months. Reported Earnings • Oct 29
Third quarter 2021 earnings released: US$0.45 loss per share (vs US$0.35 loss in 3Q 2020) The company reported a mediocre third quarter result with increased losses and weaker control over costs, although revenues improved. Third quarter 2021 results: Revenue: US$347.0m (up 33% from 3Q 2020). Net loss: US$54.4m (loss widened 34% from 3Q 2020). Over the last 3 years on average, earnings per share has fallen by 15% per year but the company’s share price has increased by 29% per year, which means it is well ahead of earnings. Price Target Changed • Oct 29
Price target decreased to US$157 Down from US$179, the current price target is an average from 19 analysts. New target price is 32% above last closing price of US$119. Stock is up 7.3% over the past year. The company is forecast to post a net loss per share of US$1.73 next year compared to a net loss per share of US$1.89 last year. Recent Insider Transactions Derivative • Oct 16
Chief of Staff exercised options and sold US$257k worth of stock On the 12th of October, John Geschke exercised 3k options at a strike price of around US$27.06 and sold these shares for an average price of US$113 per share. This trade did not impact their existing holding. Since December 2020, John's direct individual holding has increased from 32.20k shares to 37.77k. Company insiders have collectively sold US$73m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • Sep 18
Founder exercised options and sold US$4.7m worth of stock On the 15th of September, Mikkel Svane exercised 44k options at a strike price of around US$9.52 and sold these shares for an average price of US$117 per share. This trade did not impact their existing holding. For the year to December 2020, Mikkel's total compensation was 8% salary and 92% other compensation. This indicates that these sales could comprise a meaningful part of their income for the year. Since December 2020, Mikkel's direct individual holding has decreased from 921.04k shares to 841.13k. Company insiders have collectively sold US$74m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • Sep 10
Chief of Staff exercised options and sold US$289k worth of stock On the 7th of September, John Geschke exercised 3k options at a strike price of around US$27.06 and sold these shares for an average price of US$123 per share. This trade did not impact their existing holding. Since September 2020, John's direct individual holding has increased from 30.34k shares to 37.14k. Company insiders have collectively sold US$69m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • Aug 13
Independent Director notifies of intention to sell stock L. Wilson intends to sell 10k shares in the next 90 days after lodging an Intent To Sell Form on the 9th of August. If the sale is conducted around the recent share price of US$128, it would amount to US$1.3m. Since September 2020, Wilson's direct individual holding has decreased from 78.12k shares to 60.89k. Company insiders have collectively sold US$65m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • Aug 05
Chief Technology Officer exercised options and sold US$1.2m worth of stock On the 2nd of August, Adrian McDermott exercised 9k options at a strike price of around US$6.24 and sold these shares for an average price of US$129 per share. This trade did not impact their existing holding. Since September 2020, Adrian's direct individual holding has decreased from 87.28k shares to 87.00k. Company insiders have collectively sold US$64m more than they bought, via options and on-market transactions in the last 12 months. Reported Earnings • Jul 31
Second quarter 2021 earnings released: US$0.49 loss per share (vs US$0.56 loss in 2Q 2020) The company reported a solid second quarter result with reduced losses, improved revenues and improved control over expenses. Second quarter 2021 results: Revenue: US$318.2m (up 29% from 2Q 2020). Net loss: US$58.4m (loss narrowed 9.7% from 2Q 2020). Over the last 3 years on average, earnings per share has fallen by 17% per year but the company’s share price has increased by 29% per year, which means it is well ahead of earnings. Recent Insider Transactions Derivative • Jul 20
Founder exercised options and sold US$5.6m worth of stock On the 15th of July, Mikkel Svane exercised 44k options at a strike price of around US$9.52 and sold these shares for an average price of US$137 per share. This trade did not impact their existing holding. For the year to December 2020, Mikkel's total compensation was 8% salary and 92% other compensation. This indicates that these sales could comprise a meaningful part of their income for the year. Since September 2020, Mikkel's direct individual holding has decreased from 984.38k shares to 838.49k. Company insiders have collectively sold US$63m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • Jul 10
Chief of Staff exercised options and sold US$363k worth of stock On the 6th of July, John Geschke exercised 3k options at a strike price of around US$27.06 and sold these shares for an average price of US$148 per share. This trade did not impact their existing holding. Since September 2020, John's direct individual holding has increased from 30.34k shares to 35.88k. Company insiders have collectively sold US$58m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions • Jun 18
Chief Operating Officer recently sold US$422k worth of stock On the 14th of June, Jeffrey Titterton sold around 3k shares on-market at roughly US$141 per share. This was the largest sale by an insider in the last 3 months. Jeffrey has been a seller over the last 12 months, reducing personal holdings by US$703k. Recent Insider Transactions Derivative • Jun 12
Chief of Staff exercised options and sold US$325k worth of stock On the 8th of June, John Geschke exercised 3k options at a strike price of around US$27.06 and sold these shares for an average price of US$135 per share. This trade did not impact their existing holding. Since June 2020, John's direct individual holding has increased from 28.48k shares to 36.14k. Company insiders have collectively sold US$53m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • May 14
Chief of Staff notifies of intention to sell stock John Geschke intends to sell 10k shares in the next 90 days after lodging an Intent To Sell Form on the 11th of May. If the sale is conducted around the recent share price of US$136, it would amount to US$1.3m. Since June 2020, John's direct individual holding has increased from 28.48k shares to 35.08k. Company insiders have collectively sold US$47m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • May 07
Chief Technology Officer notifies of intention to sell stock Adrian McDermott intends to sell 9k shares in the next 90 days after lodging an Intent To Sell Form on the 3rd of May. If the sale is conducted around the recent share price of US$144, it would amount to US$1.4m. Since June 2020, Adrian's direct individual holding has increased from 84.86k shares to 85.32k. Company insiders have collectively sold US$47m more than they bought, via options and on-market transactions in the last 12 months. Executive Departure • May 06
CFO & Principal Accounting Officer has left the company On the 5th of May, Elena Gomez's tenure as CFO & Principal Accounting Officer ended after 5.0 years in the role. As of December 2020, Elena personally held 11.18k shares (US$1.6m worth at the time). A total of 3 executives have left over the last 12 months. Reported Earnings • May 03
First quarter 2021 earnings released: US$0.41 loss per share (vs US$0.38 loss in 1Q 2020) The company reported a solid first quarter result with improved revenues and control over costs, although losses increased. First quarter 2021 results: Revenue: US$298.0m (up 26% from 1Q 2020). Net loss: US$49.0m (loss widened 14% from 1Q 2020). Over the last 3 years on average, earnings per share has fallen by 18% per year but the company’s share price has increased by 40% per year, which means it is well ahead of earnings. Recent Insider Transactions Derivative • Apr 16
Chief People & Diversity Officer notifies of intention to sell stock InaMarie Johnson intends to sell 3k shares in the next 90 days after lodging an Intent To Sell Form on the 12th of April. If the sale is conducted around the recent share price of US$143, it would amount to US$446k. Since June 2020, InaMarie's direct individual holding has increased from 19.38k shares to 21.49k. Company insiders have collectively sold US$39m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions Derivative • Apr 04
CFO & Principal Accounting Officer notifies of intention to sell stock Elena Gomez intends to sell 20k shares in the next 90 days after lodging an Intent To Sell Form on the 1st of April. If the sale is conducted around the recent share price of US$135, it would amount to US$2.6m. Since June 2020, Elena's direct individual holding has decreased from 17.64k shares to 8.59k. Company insiders have collectively sold US$39m more than they bought, via options and on-market transactions in the last 12 months. Is New 90 Day High Low • Mar 09
New 90-day low: US$126 The company is down 6.0% from its price of US$135 on 08 December 2020. The American market is up 3.0% over the last 90 days, indicating the company underperformed over that time. It also underperformed the Software industry, which is down 1.0% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is US$66.75 per share.