Will the new coronavirus cause a recession in US in the next 6 months? On February 27th, we put the probability at 75% and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to […]
Ladies and gentlemen, thank you for standing by, and welcome to the Zendesk Q1 2020 Earnings Call. Joining me on the call today are Mikkel Svane, our Founder, CEO and Chair of the Board and Elena Gomez, our Chief Financial Officer. During the course of today's call, we may make forward-looking statements such as statements regarding our future financial performance, product development, growth prospects, ability to attract and retain customers and ability to compete effectively.
Zendesk Announces First Quarter 2020 Results
Zendesk, Inc. (NYSE:ZEN), which is in the software business, and is based in United States, saw a decent share price...
Q1 2020 Zendesk Inc Earnings Call
The Zacks Analyst Blog Highlights: Zendesk, Adobe, Netflix, Microsoft and Amazon
Zendesk (ZEN) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
In the most recent escalation, the World Health Organization (WHO) deemed the coronavirus outbreak a pandemic on March 11. In reaction to the declaration, the U.S. banned most flights to Europe in an effort to contain the virus that has already spread to 114 countries. However, the President’s response was widely perceived as insufficient both medically and economically, sending the market deeper into the red. One day later, Dow futures tumbled by over 1,000 points, with S&P 500 and Nasdaq futures dipping as well.Before panicking, the pros on Wall Street remind investors that market weakness could present a dip-buying opportunity. One of the top economic advisors for the Trump administration, Larry Kudlow, says that now is the time to pull the trigger as the full value of certain names might not be factored into the share price. “Long-term investors should think seriously about buying these dips,” he commented.Taking this into consideration, we set out on our own search for compelling investment opportunities trading at a discount. Using TipRanks’ Stock Screener tool, we were able to find 3 beaten-down stocks the analysts believe are undervalued. Not to mention each has received enough support from Wall Street to earn a “Strong Buy” consensus rating.Trade Desk Inc. (TTD)We will start with a software name. Trade Desk serves the advertising industry, offering a media-buying platform that helps users create engaging and inspiring content. TTD shares have slumped 22% lower so far this year. However, analysts aren’t giving up hope just yet.Stephens’ Kyle Evans points to its fourth quarter earnings release as being a key facet of his bullish thesis. During the quarter, spending on the company’s platform crushed the previous record, coming in at $1 billion-plus. Additionally, profitability held sturdy for the fourth year in a row with a 30%-plus AEBITDA margin and data use increased 65% year-over-year.Looking forward, management guided for spending on the platform to grow by 35.7% in 2020, compared to the 33% growth rate it achieved in 2019. According to Evans, these results are “indicators that its profitable land grab strategy on the buy-side of the digital ad ecosystem is working, and gathering momentum.”Evans added, “We believe TTD is the best way to play the rapid growth in ad supported connected TV, and investors should use recent weakness to build positions. We believe concerns about Chrome third party cookies, tough comps, lower take rates, etc. are largely misplaced and that TTD can grow into its seemingly pricey valuation by continuing to execute and expand its business in CTV and internationally.”Calling TTD the firm’s “favorite business model in the connected TV ecosystem”, it should come as no surprise that Evans advises buying the dip. In addition to keeping his bullish call on the stock, the analyst bumped up the price target from $250 to $310. This puts the upside potential at 51%. (To watch Evans’ track record, click here)What do other Wall Street analysts have to say? As it turns out, 6 out of 8 analysts that have published a recent review see the stock as a Buy, making the consensus rating a Strong Buy. With an average price target of $285, the potential twelve-month gain comes in below Evans’ forecast at 38%. (See Trade Desk stock analysis on TipRanks)Plexus Corporation (PLXS)Next up is Plexus, which specializes in complex product design, manufacturing, supply chain and aftermarket services. The stock has slipped 26% year-to-date, and while the situation appears dire, the company could be nearing an inflection point.Writing for J.P. Morgan, analyst Paul Coster argues that the company’s valuation makes it worthy of investor attention. Currently, the company trades at 14.7 times forward P/E and around 8.7 times forward EV/EBITDA, which reflect slight discounts to the 3-year mean and a substantial discount on a PEG basis. With the analyst expecting PLXS to edge out its peers in the next six to twelve months, he sees the stock as being significantly undervalued.Also impressive, in Coster’s view, is that unlike other names inhabiting the space, PLXS focuses on complex, engineering-led, manufacturing services in healthcare, industrials, aerospace and defense applications. “We believe this focus can lead to the firm easily exceeding it 5% operating margin targets over the next few years, and believe this could sustain a premium valuation multiple for PLXS in the electronics manufacturing services (EMS) space,” he stated.It should be noted that management is anticipating a disruption as a result of the coronavirus outbreak in the second half of 2020, in the shape of a $40 million hit to fiscal second quarter revenues. Even though this led Coster to reduce his estimate for operating profit, he remains bullish on Plexus’ long-term growth prospects.To this end, Coster gave his rating a boost, upgrading the call to Overweight. Given his price target of $84, shares could surge 47% in the next year. (To watch Coster’s track record, click here)Looking at the consensus breakdown, other analysts also have high hopes for PLXS. With 3 Buys and 1 Hold set in recent weeks, the word on the Street is that the stock is a Strong Buy. The $82.33 average price target brings the upside potential to 44%. (See Plexus stock analysis on TipRanks)Zendesk (ZEN)Zendesk offers easy-to-use CRM software that provides businesses with a complete sales and support solution. While shares are down 22% year-to-date, some members of the Street believe that a turnaround is on the horizon.William Blair’s Arjun Bhatia wrote in a recent note to clients that he is more confident in ZEN’s business fundamentals and long-term growth story after attending the company’s virtual analyst day. Part of the excitement is related to its Sunshine product, which has enabled new product cycles to begin. On top of this, ZEN has upgraded both the Sales and Support Suites.“Suite selling has worked well for Zendesk in the past and these new solutions with enhanced feature functionality bode well for the company, in our view. While there was some near-term noise at the analyst day from the company’s canceled Relate user conference and recent comments on coronavirus, we do not see this as a long-term threat to the business and continue to be positive on Zendesk’s product roadmap and go-to-market initiatives,” Bhatia explained.Additionally, ZEN’s decision to offer a free Lite version of Sunshine should bode well for the company, according to Bhatia. “We see the freemium approach as an effective way to get as many developers using Sunshine as possible, while also driving an upgrade motion for Support customers,” he stated.Bhatia does note that should the coronavirus situation worsen, ZEN’s full-year revenue numbers could take a hit. That being said, the analyst points out that currently, the impacts of the virus on the company are minor.In line with his recommendation to snap up shares on “outsized weakness”, Bhatia reiterated an Outperform rating but declined to set a price target.Out on Wall Street, other analysts are on the same page. A Strong Buy consensus rating breaks down into 10 Buys and 3 Holds. At $95.54, the average price target puts the upside potential at 55%. (See Zendesk stock analysis on TipRanks)
Zendesk Announces Date of First Quarter 2020 Financial Results
Zendesk earnings for the first quarter topped views while revenue edged by Wall Street targets. Zendesk stock fell as the software maker withdrew 2020 guidance amid the coronavirus lockdown.
Investors should look for stocks within growth industries that present strong longer-term buying opportunities. So let's look at three cloud-focused tech stocks that might be worth buying right now...
The beneficiaries are many, from chip companies Intel and AMD, to collaboration-software makers Atlassian and Zendesk.
Q4 2019 Zendesk Inc Earnings Call
Zendesk To Present At Upcoming Investor Conferences and Investor Meeting
Zendesk, Inc. (NYSE: ZEN) today announced a strategic alliance with Tata Consultancy Services (TCS) to provide world-class, enterprise grade CRM solutions for large Enterprises. The partnership combines Zendesk’s powerful support, sales and engagement software solutions together with TCS’ deep contextual knowledge and experience in digital transformation. Together, Zendesk and TCS will collaborate and more efficiently solve companies’ increasingly complex technological requirements and provide powerful CRM custom solutions and integrations.
Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out […]
Zendesk Inc. shares plunged as much as 7% in after-hours trading Thursday after the software company reported fiscal first-quarter earnings that missed Wall Street estimates, and it withdrew full-year 2020 guidance because of uncertainty surrounding the coronavirus pandemic. Zendesk reported a loss of $42.8 million, or 38 cents a share. Revenue climbed to $237.5 million from $181.5 million a year ago. Analysts surveyed by FactSet had expected earnings of 6 cents a share on sales of $237 million. Zendesk shares are down 8% in the last year. The broader S&P 500 index is down 0.2% in the last year.
We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy […]
Zendesk Inc (NYSE: ZEN) faces a heightened risk of attrition in its core segment that caters to small and medium businesses and is likely to witness a deceleration in closing new sales, according to Wedbush.The Zendesk Analyst Steve Koenig downgraded Zendesk from Outperform to Neutral and reduced the the price target from $97 to $72.The Zendesk Thesis Although Zendesk has been gradually transitioning to serve larger enterprises, most of its revenue still comes from providing support services to small- and mid-sized businesses, Koenig said in the Wednesday downgrade note. (See his track record here.)Due to the shift, the company has reduced its sales efforts with small and medium businesses, the analyst said. Even if Zendesk is able to sell to more enterprises, it may face higher attrition than the more enterprise-focused companies in the space, he said. The company is scheduled to report first-quarter results April 30. Wedbush reduced its revenue and earnings estimates for the quarter from $243.2 million to $239.6 million and from 9 cents per share to 8 cents per share, respectively.Given Zendesk's operating and free cash flow margins exiting fiscal 2019 and likely demand disruption due to the pandemic, the company's prospects do not support sustained upside in its shares over the next 12 months, Koenig said.ZEN Price Action Zendesk shares were trading 4.52% higher to $69.67 at the time of publication Wednesday.Related Links:Oppenehimer Says Zendesk's Moderating Upside Prevents A Bullish StanceNow And Zen: Oppenheimer Waits For Better Entry Point In ZendeskLatest Ratings for ZEN DateFirmActionFromTo Apr 2020RBC CapitalMaintainsOutperform Apr 2020WedbushDowngradesOutperformNeutral Apr 2020B of A SecuritiesReiteratesBuy View More Analyst Ratings for ZEN View the Latest Analyst Ratings See more from Benzinga * Bullish J2 Global Analyst Says Company's Valuation Has 'Relative Downside Protection' * GameStop's Short-Term Sales Boost To Power Down Soon, Analyst Says * Coca-Cola Faces Deteriorating Environment, But BofA Says Fundamentals Remain Solid(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
(Bloomberg) -- Zendesk Inc. withdrew its annual sales forecast and projected slowing revenue growth in the second quarter, signaling that the coronavirus pandemic has trimmed demand for customer-service software.Revenue will be $237 million to $243 million in the period ending June 30, which would be as much as a 25% increase from a year earlier, the San Francisco-based company said Thursday in a statement. Analysts had expected $245 million, according to data compiled by Bloomberg. Zendesk projected operating income, excluding some expenses, of $8 million to $12 million.The company in February told investors to expect sales of as much as $1.07 billion in 2020. Now, Zendesk’s timetable for crossing the billion-dollar revenue mark is in doubt. First-quarter sales increased 31% to $237.4 million from a year earlier, in line with analysts’ expectations.Zendesk Chief Executive Officer Mikkel Svane has sought to sell the company’s software to larger businesses and, in the process, compete more directly against Salesforce.com Inc. The company now relies on small and mid-sized businesses seeking applications to manage their customer relationships. Before the results, analysts had warned that Zendesk’s customer base would expose it more directly to the economic downturn than software makers with larger clients like Microsoft Corp. and Salesforce.Chief Financial Officer Elena Gomez said she was worried about the company’s “pivot” to remote work as the virus hit. “We’ve been able to continue to do business and we’ve had a lot of organizations and large enterprises coming to us to adopt our solutions to help respond to the crisis,” she said. “That positions us for strength as we come out of Covid.”Zendesk is seeking payment flexibility for customers in hard-hit industries, Gomez said on a conference call. And there has been a surge in use of customer-service software among all its clients, Svane added.Shares declined about 5% in extended trading after closing at $76.88 in New York. The stock has been little changed since the start of the year.(Updates with CFO remarks in sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.