Zendesk (NYSE: ZEN) is one of 65 publicly-traded companies in the “Application Software” industry, but how does it weigh in compared to its peers? We will compare Zendesk to related companies based on the strength of its profitability, analyst recommendations, dividends, risk, earnings, institutional ownership and valuation.

Profitability

This table compares Zendesk and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zendesk -29.34% -32.10% -20.12%
Zendesk Competitors -61.33% -91.79% -16.24%

Insider and Institutional Ownership

96.1% of Zendesk shares are owned by institutional investors. Comparatively, 68.7% of shares of all “Application Software” companies are owned by institutional investors. 5.3% of Zendesk shares are owned by insiders. Comparatively, 15.7% of shares of all “Application Software” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

Zendesk has a beta of 1.81, suggesting that its share price is 81% more volatile than the S&P 500. Comparatively, Zendesk’s peers have a beta of 1.61, suggesting that their average share price is 61% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Zendesk and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zendesk 0 2 10 0 2.83
Zendesk Competitors 244 1698 2919 109 2.58

Zendesk currently has a consensus target price of $32.67, suggesting a potential upside of 12.22%. As a group, “Application Software” companies have a potential upside of 6.66%. Given Zendesk’s stronger consensus rating and higher probable upside, analysts clearly believe Zendesk is more favorable than its peers.

Valuation and Earnings

This table compares Zendesk and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Zendesk $363.62 million -$86.63 million -26.46
Zendesk Competitors $761.43 million $137.66 million -11.07

Zendesk’s peers have higher revenue and earnings than Zendesk. Zendesk is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Zendesk beats its peers on 7 of the 12 factors compared.

About Zendesk

Zendesk, Inc. (Zendesk) is a software development company. The Zendesk family of products is built to work together to help organizations understand and manage customer relationships. All Zendesk products share a common interface and are being developed to support a shared services infrastructure and common customer data platform. Zendesk’s products are developed using agile software techniques, and are designed to incorporate and innovate on customer feedback obtained through beta and Early Access Programs (EAPs). Its family of products includes Zendesk Support, Zendesk Chat, Zendesk Talk, Zendesk Help Center, Zendesk Message, Zendesk Explore and Zendesk Connect. Zendesk’s developer platform allows organizations to extend the functionality of its family of products and customize the experience for their employees and customers. Key components of Zendesk’s developer platform include Zendesk Embeddables, Zendesk application program interfaces (APIs) and Zendesk Applications.

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