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ZENDESK INC (ZEN) Stock Fundamental Analysis

NYSE:ZEN - New York Stock Exchange, Inc. - US98936J1016 - Common Stock - Currency: USD

77.48  +0.02 (+0.03%)

After market: 77.47 -0.01 (-0.01%)

Fundamental Rating

3

We assign a fundamental rating of 3 out of 10 to ZEN. ZEN was compared to 283 industry peers in the Software industry. ZEN may be in some trouble as it scores bad on both profitability and health. ZEN shows excellent growth, but is valued quite expensive already.


Dividend Valuation Growth Profitability Health

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1

1. Profitability

1.1 Basic Checks

In the past year ZEN was profitable.
In the past year ZEN had a positive cash flow from operations.
ZEN Yearly Net Income VS EBIT VS OCF VS FCFZEN Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 0 100M -100M -200M

1.2 Ratios

Industry RankSector Rank
ROA -11.43%
ROE N/A
ROIC N/A
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ZEN Yearly ROA, ROE, ROICZEN Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 -10 -20 -30 -40 -50

1.3 Margins

Industry RankSector Rank
OM -11.94%
PM (TTM) -17.82%
GM N/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
ZEN Yearly Profit, Operating, Gross MarginsZEN Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 0 20 -20 40 -40 60

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2

2. Health

2.1 Basic Checks

ZEN does not have a ROIC to compare to the WACC, probably because it is not profitable.
Compared to 1 year ago, ZEN has more shares outstanding
Compared to 1 year ago, ZEN has an improved debt to assets ratio.
ZEN Yearly Shares OutstandingZEN Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 20M 40M 60M 80M 100M
ZEN Yearly Total Debt VS Total AssetsZEN Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 500M 1B 1.5B 2B

2.2 Solvency

ZEN has an Altman-Z score of 2.49. This is not the best score and indicates that ZEN is in the grey zone with still only limited risk for bankruptcy at the moment.
The Debt to FCF ratio of ZEN is 13.52, which is on the high side as it means it would take ZEN, 13.52 years of fcf income to pay off all of its debts.
A Debt/Equity ratio of 3.28 is on the high side and indicates that ZEN has dependencies on debt financing.
Industry RankSector Rank
Debt/Equity 3.28
Debt/FCF 13.52
Altman-Z 2.49
ROIC/WACCN/A
WACC10.26%
ZEN Yearly LT Debt VS Equity VS FCFZEN Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 0 200M 400M 600M 800M

2.3 Liquidity

A Current Ratio of 1.83 indicates that ZEN should not have too much problems paying its short term obligations.
A Quick Ratio of 1.83 indicates that ZEN should not have too much problems paying its short term obligations.
Industry RankSector Rank
Current Ratio 1.83
Quick Ratio 1.83
ZEN Yearly Current Assets VS Current LiabilitesZEN Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 500M 1B

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9

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 27.59% over the past year.
Measured over the past years, ZEN shows a very strong growth in Earnings Per Share. The EPS has been growing by 37.95% on average per year.
ZEN shows a strong growth in Revenue. In the last year, the Revenue has grown by 27.36%.
The Revenue has been growing by 33.74% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)27.59%
EPS 3Y37.95%
EPS 5YN/A
EPS Q2Q%88.24%
Revenue 1Y (TTM)27.36%
Revenue growth 3Y30.76%
Revenue growth 5Y33.74%
Sales Q2Q%20.14%

3.2 Future

The Earnings Per Share is expected to grow by 36.24% on average over the next years. This is a very strong growth
ZEN is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.27% yearly.
EPS Next Y19.22%
EPS Next 2Y21.55%
EPS Next 3Y33.11%
EPS Next 5Y36.24%
Revenue Next Year24.81%
Revenue Next 2Y20.95%
Revenue Next 3Y19.62%
Revenue Next 5Y15.27%

3.3 Evolution

The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
ZEN Yearly Revenue VS EstimatesZEN Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 500M 1B 1.5B 2B 2.5B
ZEN Yearly EPS VS EstimatesZEN Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0 1 2

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1

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 104.70, which means the current valuation is very expensive for ZEN.
ZEN is valuated expensively when we compare the Price/Earnings ratio to 26.52, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 83.24, the valuation of ZEN can be described as expensive.
ZEN's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 22.25.
Industry RankSector Rank
PE 104.7
Fwd PE 83.24
ZEN Price Earnings VS Forward Price EarningsZEN Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80 100

4.2 Price Multiples

Industry RankSector Rank
P/FCF 91.29
EV/EBITDA -50.13
ZEN Per share dataZEN EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 5 10

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ZEN does not grow enough to justify the current Price/Earnings ratio.
A more expensive valuation may be justified as ZEN's earnings are expected to grow with 33.11% in the coming years.
PEG (NY)5.45
PEG (5Y)N/A
EPS Next 2Y21.55%
EPS Next 3Y33.11%

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0

5. Dividend

5.1 Amount

ZEN does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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ZENDESK INC

NYSE:ZEN (11/21/2022, 8:14:42 PM)

After market: 77.47 -0.01 (-0.01%)

77.48

+0.02 (+0.03%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)10-27 2022-10-27/amc
Earnings (Next)02-08 2023-02-08
Inst Owners0%
Inst Owner Change0%
Ins Owners0.5%
Ins Owner Change0%
Market Cap8.69B
Analysts65.26
Price Target95.06 (22.69%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr YearsN/A
Div Non Decr YearsN/A
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)27.98%
Min EPS beat(2)13.37%
Max EPS beat(2)42.59%
EPS beat(4)2
Avg EPS beat(4)6.12%
Min EPS beat(4)-18.13%
Max EPS beat(4)42.59%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-1.77%
Min Revenue beat(2)-3.21%
Max Revenue beat(2)-0.34%
Revenue beat(4)1
Avg Revenue beat(4)-0.77%
Min Revenue beat(4)-3.21%
Max Revenue beat(4)0.49%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)N/A
EPS NQ rev (1m)-5.32%
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)N/A
Revenue NQ rev (1m)-1.55%
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)N/A
Valuation
Industry RankSector Rank
PE 104.7
Fwd PE 83.24
P/S 5.47
P/FCF 91.29
P/OCF 69.17
P/B 25.06
P/tB 61.9
EV/EBITDA -50.13
EPS(TTM)0.74
EY0.96%
EPS(NY)0.93
Fwd EY1.2%
FCF(TTM)0.85
FCFY1.1%
OCF(TTM)1.12
OCFY1.45%
SpS14.15
BVpS3.09
TBVpS1.25
PEG (NY)5.45
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -11.43%
ROE N/A
ROCE N/A
ROIC N/A
ROICexc N/A
ROICexgc N/A
OM -11.94%
PM (TTM) -17.82%
GM N/A
FCFM N/A
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
F-Score5
Asset Turnover0.64
Health
Industry RankSector Rank
Debt/Equity 3.28
Debt/FCF 13.52
Debt/EBITDA N/A
Cap/Depr 79.32%
Cap/Sales N/A
Interest Coverage N/A
Cash Conversion N/A
Profit Quality N/A
Current Ratio 1.83
Quick Ratio 1.83
Altman-Z 2.49
F-Score5
WACC10.26%
ROIC/WACCN/A
Cap/Depr(3y)96.73%
Cap/Depr(5y)96.2%
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)27.59%
EPS 3Y37.95%
EPS 5YN/A
EPS Q2Q%88.24%
EPS Next Y19.22%
EPS Next 2Y21.55%
EPS Next 3Y33.11%
EPS Next 5Y36.24%
Revenue 1Y (TTM)27.36%
Revenue growth 3Y30.76%
Revenue growth 5Y33.74%
Sales Q2Q%20.14%
Revenue Next Year24.81%
Revenue Next 2Y20.95%
Revenue Next 3Y19.62%
Revenue Next 5Y15.27%
EBIT growth 1Y-22.79%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year69.87%
EBIT Next 3Y51.4%
EBIT Next 5Y39.49%
FCF growth 1Y376.36%
FCF growth 3Y57.09%
FCF growth 5YN/A
OCF growth 1Y923.24%
OCF growth 3Y29.25%
OCF growth 5Y47.21%