Critical Analysis: Zendesk (ZEN) & Its Peers
Zendesk (NYSE: ZEN) is one of 63 publicly-traded companies in the “Application Software” industry, but how does it contrast to its rivals? We will compare Zendesk to similar businesses based on the strength of its analyst recommendations, dividends, risk, profitability, valuation, institutional ownership and earnings.
This is a breakdown of current ratings for Zendesk and its rivals, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Zendesk presently has a consensus target price of $32.67, indicating a potential upside of 11.80%. As a group, “Application Software” companies have a potential upside of 1.03%. Given Zendesk’s stronger consensus rating and higher probable upside, equities analysts plainly believe Zendesk is more favorable than its rivals.
This table compares Zendesk and its rivals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk and Volatility
Zendesk has a beta of 1.81, suggesting that its stock price is 81% more volatile than the S&P 500. Comparatively, Zendesk’s rivals have a beta of 1.68, suggesting that their average stock price is 68% more volatile than the S&P 500.
Institutional & Insider Ownership
96.1% of Zendesk shares are held by institutional investors. Comparatively, 70.8% of shares of all “Application Software” companies are held by institutional investors. 5.3% of Zendesk shares are held by company insiders. Comparatively, 16.0% of shares of all “Application Software” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Zendesk and its rivals gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Zendesk||$363.62 million||-$86.63 million||-26.56|
|Zendesk Competitors||$765.20 million||$136.59 million||-9.99|
Zendesk’s rivals have higher revenue and earnings than Zendesk. Zendesk is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.
Zendesk beats its rivals on 7 of the 12 factors compared.
Zendesk Company Profile
Zendesk, Inc. (Zendesk) is a software development company. The Zendesk family of products is built to work together to help organizations understand and manage customer relationships. All Zendesk products share a common interface and are being developed to support a shared services infrastructure and common customer data platform. Zendesk’s products are developed using agile software techniques, and are designed to incorporate and innovate on customer feedback obtained through beta and Early Access Programs (EAPs). Its family of products includes Zendesk Support, Zendesk Chat, Zendesk Talk, Zendesk Help Center, Zendesk Message, Zendesk Explore and Zendesk Connect. Zendesk’s developer platform allows organizations to extend the functionality of its family of products and customize the experience for their employees and customers. Key components of Zendesk’s developer platform include Zendesk Embeddables, Zendesk application program interfaces (APIs) and Zendesk Applications.
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