NYSE:ZEN

Stock Analysis Report

Executive Summary

Zendesk, Inc., a software development company, provides software as a service solutions for organizations.


Snowflake Analysis

Adequate balance sheet and slightly overvalued.


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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

14.0%

ZEN

9.6%

US Software

10.5%

US Market


1 Year Return

-23.7%

ZEN

8.0%

US Software

-11.5%

US Market

Return vs Industry: ZEN underperformed the US Software industry which returned 8% over the past year.

Return vs Market: ZEN underperformed the US Market which returned -11.5% over the past year.


Shareholder returns

ZENIndustryMarket
7 Day14.0%9.6%10.5%
30 Day-18.8%-7.8%-15.4%
90 Day-16.4%-7.1%-21.4%
1 Year-23.7%-23.7%9.2%8.0%-9.6%-11.5%
3 Year131.3%131.3%100.6%92.0%12.6%5.4%
5 Year188.0%188.0%170.4%151.5%32.8%18.1%

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?

29.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ZEN ($64.85) is trading below our estimate of fair value ($92.31)

Significantly Below Fair Value: ZEN is trading below fair value by more than 20%.


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 (16x) compared to the US Software industry average (4.3x).


Next Steps

Future Growth

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

11.3%

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 (18.7% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: ZEN's revenue (18.7% per year) is forecast to grow slower 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 (29.1%)


Next Steps

Past Performance

How has Zendesk performed over the past 5 years?

-16.9%

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 -16.9% 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 (18.7%).


Return on Equity

High ROE: ZEN has a negative Return on Equity (-37.04%), as it is currently unprofitable.


Next Steps

  • Explore strong past performing companies in the Software industry.

Financial Health

How is Zendesk's financial position?


Financial Position Analysis

Short Term Liabilities: ZEN's short term assets ($692.8M) exceed its short term liabilities ($478.7M).

Long Term Liabilities: ZEN's short term assets ($692.8M) exceed its long term liabilities ($577.9M).


Debt to Equity History and Analysis

Debt Level: ZEN's debt to equity ratio (105.6%) is considered high.

Reducing Debt: ZEN's debt to equity ratio has increased from 6% to 105.6% over the past 5 years.


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 1.4x 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 56.8% per year.


Next Steps

Dividend

What is Zendesk's 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 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

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

2.4yrs

Average management tenure


CEO

Mikkel Svane (48yo)

12.58s

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 ($USD3.30M) is below average for companies of similar size in the US market ($USD7.47M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Mikkel Svane
Founder12.58yrsUS$3.30m0.95% $72.1m
Elena Gomez
Chief Financial Officer3.83yrsUS$2.87m0.016% $1.2m
John Keiser
Chief Operating Officer2.58yrsUS$2.85m0.029% $2.2m
Norman Gennaro
President of Sales2.17yrsUS$6.93m0.017% $1.3m
InaMarie Johnson
Chief People & Diversity Officer1.75yrsUS$5.39m0.014% $1.1m
Alexander Aghassipour
Founder & Chief Product Officer12.58yrsno datano data
Morten Primdahl
Co-Founderno datano datano data
Ying Liu
Chief Accounting Officer0.67yrno data0.00085% $64.6k
Colleen Berube
Chief Information Officer1.08yrsno datano data
Marc Cabi
VP of Strategy & Head of Investor Relationsno datano datano data

2.4yrs

Average Tenure

51yo

Average Age

Experienced Management: ZEN's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Mikkel Svane
Founder12.58yrsUS$3.30m0.95% $72.1m
Carl Bass
Lead Independent Director1.17yrsUS$316.27k0.019% $1.4m
L. Wilson
Independent Director6.17yrsUS$268.55k0.10% $7.8m
Thomas Szkutak
Director1.17yrsno data0.0022% $170.9k
Caryn Marooney
Independent Director6.17yrsUS$311.13k0.046% $3.5m
Michael Frandsen
Independent Director2.33yrsUS$306.02k0.0076% $574.2k
Hilarie Koplow-McAdams
Independent Director2.5yrsUS$256.05k0.0064% $488.4k
Michael Curtis
Director0.92yrno data0.00099% $75.2k

2.4yrs

Average Tenure

55yo

Average Age

Experienced Board: ZEN's board of directors are not considered experienced ( 2.4 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 4.8%.


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$7.596b
  • Shares outstanding: 113.35m
  • 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
0ZDBRSE (Berne Stock Exchange)YesCommon StockCHCHFMay 2014
ZEN *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNMay 2014

Biography

Zendesk, Inc., a software development company, provides software as a service solutions for organizations. Its flagship product is Zendesk Support, a system for tracking, prioritizing, and solving customer support tickets across various channels. The company also offers Zendesk Chat, a live chat software to connect with customers on Websites, applications, and mobile devices; Zendesk Talk, a cloud-based call center software that facilitates personal and productive phone support conversations between organizations and their customers; Zendesk Guide, a knowledge base that powers customer self-service and support agent productivity; Zendesk Sell, a sales force automation software to enhance productivity, processes, and pipeline visibility for sales teams; and Zendesk Explore, which provides analytics for organizations to measure and enhance the customer experience. In addition, it provides Zendesk Sunshine, a customer relationship management platform; Sunshine Conversations, a messaging platform solution; Zendesk Embeddables, which allow developers to embed support, chat, and guide experiences on the Web and within mobile applications; and Zendesk application platform interfaces and apps. The company has operations in North America, Latin America, Europe, the Middle East, Africa, Australia, Asia, and South America. Zendesk, Inc. was founded in 2007 and is headquartered in San Francisco, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/28 04:36
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.