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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. Scalper1 News
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