Tag Archives: zen

Zendesk Investor Day: How To Hit $1Bil Rev. Vs. Salesforce, Oracle

Zendesk ( ZEN ) is expected to elaborate on plans to compete with bigger rivals Salesforce.com ( CRM ) and Oracle ( ORCL ) when the provider of customer-support software holds its investor day on Tuesday. Zendesk in November expanded a partnership with Microsoft ( MSFT ), whose Office 365 is the most widely used cloud app by businesses. Providing support for Microsoft’s cloud platforms could help Zendesk vs. Salesforce.com and Oracle, analysts say. Oracle acquired RightNow in 2011 to boost its efforts in customer-support software. Zendesk, which aims to sell more to larger companies and enterprises, as well as to its longtime base of smaller and midsize businesses, also competes with Freshdesk and Desk.com. Research firm Gartner estimates that 80% of Zendesk’s customer base has 20 users or less. With $209 million in 2015 revenue, Zendesk has touted a $1 billion target by 2020. “We expect much investor interest around the trajectory of Zendesk’s path toward their $1B revenue goal in 2020,” wrote Stan Zlotsky, a Morgan Stanley analyst, in a research report out Monday. “With the unveiling of the new CFO, Elena Gomez, we think investors will be looking to better understand her thinking around the $1B target and any potential upside/downside risks. “Given the renewed market focus on profitability, in addition to growth, we believe an update on the company’s plans for cash generation and reaching positive operating margins would be very helpful in framing investors’ expectations.” Zendesk stock jumped last week after the enterprise software company reported a smaller-than-expected Q1 loss and raised its full-year 2016 revenue guidance, breaking out of a cup-with-handle base at a 23.87 buy point. Zendesk stock was up more than 1% in early afternoon trading in the stock market today , near 23.75. Zendesk, with its shares up less than 3% in the past 12 months, has a so-so IBD Composite Rating of 64 out of a possible 99.

Four Notable Tech Stocks With Earnings After Close Worth Watching

Earnings reports are on tap for Paycom Software ( PAYC ), Rubicon Project ( RUBI ), Zendesk ( ZEN ) and Zillow Group ( ZG ) after the market close Tuesday, and all sport long streaks of double-digit, or higher, sales growth. Earnings reports can often create big stock moves, up or down, depending on whether the company misses or beats Wall Street’s expectations, and whether its outlook for the upcoming quarter and year beat or miss expectations. Paycom is expected to report revenue of $83.4 million, up 51% year over year and maintaining a string of double-digit gains going back more than four years. The consensus on earnings per share minus items is 20 cents, up 67%. Paycom provides a cloud-based employment management platform with a software-as-a-service business model, with customers buying the software as needed. The company came public in April 2014. Paycom has a strong IBD Composite Rating (CR) of 96 and the highest-possible EPS Rating of 99. Credit Suisse analyst Michael Nemeroff has an outperform rating on Paycom stock, and price target of 43. “We believe that Paycom is well positioned to deliver strong revenue growth over the next two years,” Nemeroff  wrote in an earnings preview report. Paycom stock was near 38, down 2.5%, in morning trading in the stock market today . Rubicon Revenue Could Cross At 60% Gain Rubicon Project is expected to report revenue of $59.4 million, up 60% and maintaining double- or triple-digit revenue growth going back more than four years. The EPS consensus minus items is 3 cents, vs. 2 cents last year. Rubicon made its IPO in April 2014. It provides an online platform that helps optimize digital ad buying, selling and placement. The stock has a strong 98 CR and an EPS Rating of 80. RBC Capital Markets analyst Andrew Bruckner rates Rubicon stock outperform, with a price target of 22. Rubicon stock was near 19.70, flat, Tuesday morning. Zendesk Also Growing By Double-Digit Percentages Zendesk is expected to report revenue of $63.9 million, up 51% and maintaining a string of double- and triple-digit revenue growth going back more than four years. The consensus on EPS minus earnings is a 10-cent loss. The company, which came public in May 2014, has yet to show a profit. On Monday, Zendesk announced it hired a new chief financial officer, Elena Gomez, who previously was senior vice president of finance and strategy for Salesforce.com ( CRM ). Zendesk is a cloud-based provider of customer service software. The stock has a CR of 64 and EPS Rating of 46. Rosenblatt Securities analyst Kirk Adams rates Zendesk stock a buy, with a price target of 25. “We anticipate a solid report and positive commentary on the recently completed quarter and their future prospects,” Adams wrote in an earnings preview. Zendesk stock was near 23, down 2%, Tuesday morning. Zillow Seen Swinging To A Loss Zillow Group is expected to report earnings of 176.6 million, up 39% and maintaining double or triple digit growth going back more than four years. The EPS consensus is a 9-cent loss, swinging from a 5-cent profit in the year-earlier quarter. Zillow, the leading real estate website, came public in July 2011. The stock has a CR of 54  and EPS Rating of 50. Cowen analyst Thomas Champion has an underperform rating on Zillow and a price target of 12. Zillow stock was near 25.50, down 2%, Tuesday morning.

Zendesk Attracting Larger Customers For Its Business Software

When you’re “a small player in a large market that is still new, fragmented and growing,” a key to success is “staying one step ahead of the competition,” and that’s what workplace software developer Zendesk ( ZEN ) is doing, said Summit Research analyst Jonathan Kees. Following the upbeat commentary in Kees’ research note, issued Sunday, Zendesk stock was up a fraction in early afternoon trading in the stock market today , but it’s still more than 25% below a 17-month high at 27.52, touched Dec. 4. Like other players in the infamous Software Sag of 2016, Zendesk fell hard in January and early February, hitting a 21-month low of 14.39 low on Feb. 9. Zendesk, which specializes in customer relationship management (CRM) software, went public in May 2014, priced at 9. Initiating coverage, Summit Research gave Zendesk a buy rating with a 25 price target. Zendesk is “executing on its growth strategy in a largely untapped $7.6 billion market, moving successfully toward positive (free cash flow) and profitability, and maintaining revenue growth in the 30%-plus (rate) over the next several years,” Kees said. “Most of Zendesk’s customers are SMBs (small to medium-size businesses), though the company has been moving upmarket, with customer deals with more than 100 seats now almost a third of monthly recurring revenues. Among other benefits, larger customers buy more, tend to purchase annual contracts and raise overall ARPU (average revenue per user). Founded in 2007, Zendesk is the oldest of the vendors targeting SMBs.” Big rivals such as  Microsoft ( MSFT ),   Salesforce.com ( CRM ) and Oracle ( ORCL ) also target midsize businesses. Shares of all three were down a fraction Monday afternoon. “As ZEN moves upmarket, (it) faces deep-pocketed competitors like Salesforce.com and Oracle that can easily bundle customer engagement functionality with their total offerings,” Kees warned. Zendesk is targeting positive free cash flow by 2017, profitability by 2020 and $1 billion in sales by 2020, he noted. For its Q1 ending Thursday, 12 analysts surveyed by Thomson Reuters expect a consensus 10-cent loss, flat with a year ago, on revenue up 56% to $66 million. Zendesk CFO Alan Black is expected to leave this year. Kees said, “We are always a little cautious and little worried when a CFO leaves a company. However, we are cautiously optimistic Zendesk will take appropriate steps to identify a CFO who can take the company to the next level ($1 billion in revenue by 2020).”