NYSE:ZEN

Stock Analysis Report

Executive Summary

Zendesk, Inc., a software development company, provides SaaS products for organizations.

Rewards

Revenue is forecast to grow 22.24% per year

Risk Analysis

Currently unprofitable and not forecast to become profitable over the next 3 years

Shareholders have been diluted in the past year



Snowflake Analysis

Excellent balance sheet with limited growth.


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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.2%

ZEN

-1.6%

US Software

0.03%

US Market


1 Year Return

29.6%

ZEN

33.3%

US Software

18.6%

US Market

Return vs Industry: ZEN underperformed the US Software industry which returned 33.3% over the past year.

Return vs Market: ZEN exceeded the US Market which returned 18.6% over the past year.


Shareholder returns

ZENIndustryMarket
7 Day-4.2%-1.6%0.03%
30 Day6.9%2.5%1.7%
90 Day0.1%5.8%5.7%
1 Year29.6%29.6%35.4%33.3%21.1%18.6%
3 Year234.2%234.2%126.9%117.8%45.6%36.2%
5 Year223.6%223.6%182.3%162.2%71.1%52.3%

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?

19.38x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: ZEN ($75.7) is trading above our estimate of fair value ($69.17)

Significantly Below Fair Value: ZEN is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ZEN is unprofitable, so we can't compare its PE Ratio to the 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 (19.4x) compared to the US Software industry average (5.6x).


Next Steps

Future Growth

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

30.2%

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 (22.2% per year) is forecast to grow faster than the US market (7.4% per year).

High Growth Revenue: ZEN's revenue (22.2% 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 low in 3 years time (17%).


Next Steps

Past Performance

How has Zendesk performed over the past 5 years?

-17.2%

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 -17.2% 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 (20.8%).


Return on Equity

High ROE: ZEN has a negative Return on Equity (-38.14%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Zendesk's financial position?


Financial Position Analysis

Short Term Liabilities: ZEN's short term assets ($616.7M) exceed its short term liabilities ($450.0M).

Long Term Liabilities: ZEN's short term assets ($616.7M) exceed its long term liabilities ($572.3M).


Debt to Equity History and Analysis

Debt Level: ZEN's debt to equity ratio (109.1%) is considered high.

Reducing Debt: ZEN had negative shareholder equity 5 years ago, but is now positive and has therefore improved.


Balance Sheet

Inventory Level: ZEN has a low level of unsold assets or inventory.

Debt Coverage by Assets: ZEN's debt is covered by short term assets (assets are 1.3x debt).


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 76.6% per year.


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.4%forecastin3Years0%

Current dividend yield vs market & industry

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

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

What is the CEO of Zendesk's salary, the management and board of directors tenure and is there insider trading?

2.1yrs

Average management tenure


CEO

Mikkel Svane (48yo)

12.3yrs

Tenure

US$3,303,579

Compensation

Mr. Mikkel Asger Svane has been 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. Svane served as  ...


CEO Compensation Analysis

Compensation vs Market: Mikkel's total compensation ($USD3.30M) is below average for companies of similar size in the US market ($USD6.81M).

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


Management Age and Tenure

2.1yrs

Average Tenure

51yo

Average Age

Experienced Management: ZEN's management team is considered experienced (2.1 years average tenure).


Board Age and Tenure

2.2yrs

Average Tenure

55yo

Average Age

Experienced Board: ZEN's board of directors are not considered experienced ( 2.2 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$7,704,12022 Aug 19
Mikkel Svane
EntityIndividual
Role
Chief Executive Officer
Founder
Shares100,000
Max PriceUS$77.04
SellUS$180,60011 Jun 19
Jeffrey Titterton
EntityIndividual
Shares2,000
Max PriceUS$90.30
SellUS$267,93910 Jun 19
Jeffrey Titterton
EntityIndividual
Shares3,000
Max PriceUS$89.31
SellUS$390,57220 Feb 19
Elizabeth Nelson
EntityIndividual
Shares5,000
Max PriceUS$78.11

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.9%.


Management Team

  • InaMarie Johnson (54yo)

    Chief People & Diversity Officer

    • Tenure: 1.5yrs
    • Compensation: US$5.39m
  • Marc Cabi

    VP of Strategy & Head of Investor Relations

    • Tenure: 0yrs
  • Tom Keiser (53yo)

    Chief Operating Officer

    • Tenure: 2.3yrs
    • Compensation: US$2.85m
  • Mikkel Svane (48yo)

    Founder

    • Tenure: 12.3yrs
    • Compensation: US$3.30m
  • Alexander Aghassipour (51yo)

    Founder & Chief Product Officer

    • Tenure: 12.3yrs
  • Morten Primdahl (45yo)

    Co-Founder

    • Tenure: 0yrs
  • Elena Gomez (49yo)

    Chief Financial Officer

    • Tenure: 3.6yrs
    • Compensation: US$2.87m
  • Norman Gennaro (53yo)

    President of Sales

    • Tenure: 1.9yrs
    • Compensation: US$6.93m
  • Colleen Berube

    Chief Information Officer

    • Tenure: 0.8yrs
  • Christina Liu

    Chief Accounting Officer

    • Tenure: 0.4yrs

Board Members

  • Carl Bass (61yo)

    Lead Independent Director

    • Tenure: 0.9yrs
    • Compensation: US$316.27k
  • L. Wilson (55yo)

    Independent Director

    • Tenure: 5.9yrs
    • Compensation: US$268.55k
  • Tom Szkutak (58yo)

    Director

    • Tenure: 0.9yrs
  • Caryn Marooney (51yo)

    Independent Director

    • Tenure: 5.9yrs
    • Compensation: US$311.13k
  • Mike Frandsen (57yo)

    Independent Director

    • Tenure: 2.1yrs
    • Compensation: US$306.02k
  • Mikkel Svane (48yo)

    Founder

    • Tenure: 12.3yrs
    • Compensation: US$3.30m
  • Hilarie Koplow-McAdams (55yo)

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: US$256.05k
  • Mike Curtis

    Director

    • Tenure: 0.7yrs

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$8.459b
  • Shares outstanding: 112.18m
  • Website: https://www.zendesk.com

Number of Employees


Location

  • Zendesk, Inc.
  • 1019 Market Street
  • San Francisco
  • California
  • 94103
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ZENNYSE (New York Stock Exchange)YesCommon StockUSUSDMay 2014
0M3FLSE (London Stock Exchange)YesCommon StockGBUSDMay 2014
ZEN *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNMay 2014

Biography

Zendesk, Inc., a software development company, provides SaaS products for organizations. Its flagship product is Zendesk Support, a system for tracking, prioritizing, and solving customer support tickets a ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/08 00:50
End of Day Share Price2019/12/06 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


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.