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Friday, October 23, 2020

The Forecast Just Changed on Zendesk Inc. (NYSE:ZEN)

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Zendesk Inc. (ZEN) shares are trading at higher $113.24 and the avg recommendation for the stock is Strong Buy, while the current analyst price target stands at $109.97.

To add more color to this target, the company’s high over the last year is $113.63 and the low is $50.23. Over the last 52 weeks, ZEN is up 55.44% while the S&P 500 is up 18.31%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, ZEN reported a profit of $185.15 million. Zendesk Inc. also saw revenues increase to $246.66 million. In addition, ZEN has free cash flow of -$68.88 million as of 06-2020. The company’s EBITDA came in at -$2.5 million which compares well with its peers.

ZEN booked profit margins of -19.20%, its Return on Equity (ROE) is -40.50%, and its Return on Assets is -11.00%. All told, it is clear that, ZEN needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. ZEN has a short ratio of 5.82 and outstanding shares of 114.60M.

Company Outlook

ZEN has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 1.07 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at -1.57. Zendesk Inc. ZEN also noted assets of $2.0 billion at the end of the last quarter. Investors should also keep an eye on sector updates as ZEN has historically followed its peers on positive news.

All told, Zendesk Inc. ZEN has strung together solid data and demonstrated underlying fundamentals. At its current valuation, ZEN represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Zendesk Inc. ZEN is now commanding a market cap of 12.71B and a float of 113.66M. ZEN is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of ZEN stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in ZEN, either long or short, and we have not been compensated for this article.

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