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Zendesk Inc ZEN

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Morningstar’s Analysis

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Zendesk Suite Hits the Ground Running; Raise FVE to $145 From $136

Dan Romanoff, CPA Equity Analyst

Analyst Note

| Dan Romanoff, CPA |

Narrow-moat Zendesk delivered strong first-quarter results, with both revenue and adjusted EPS finishing in line with our expectations, ahead of management’s guidance. Management also revised the firm’s 2021 guidance upward, citing strong performance in the first quarter along with positive momentum expected to continue throughout 2021. While the pandemic continues to foster demand for remote work solutions and customer engagement offerings, we believe Zendesk’s new simplified suite of solutions coupled with the addition of messaging capabilities can capitalize on these growth opportunities and employ its land-and-expand sales strategy. Our bullish view on this offering is backed up by the fact that more than 3,000 customers have adopted the Zendesk suite in its first two months since launch. With more robust near-term growth prospects, coupled with strong adoption of the Zendesk suite, we are increasing our fair value estimate to $145 per share, from $136. We view shares as fairly valued.

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Company Profile

Business Description

Founded in 2007, Zendesk provides a portfolio of customer engagement software solutions via single applications or the Sunshine suite. Its software unifies customer communication and data across various channels and business units, and simplifies customer service and engagement across self service, phone, chat, messaging, and email.

989 Market Street
San Francisco, CA, 94103
T +1 415 418-7506
Sector Technology
Industry Software - Application
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Speculative Growth
Employees 4,520