Zendesk, Inc. (XNYS:ZEN) In-Depth Stock/Fundamental/Options Analysis Today

Primary Facts

ZEN

Name:

ZENDESK, INC. (XNYS:ZEN)

Sector:

758.00K

Industry:

Software�Application

CEO:

Mr. Mikkel Svane

Total Employees:

6,540

Our Technological Advancement Rating

Our Rating:

Technological advancement compared to industry is -105.23% lower

ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ZENDESK, INC.(ZEN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�APPLICATION INDUSTRY. DATE: 07/09/2022

Primary Targets/Price Insights

Previous Close ($) :

76.77

One Month Price Target:

$77.19

Six Month Price Target :

$79.26

Likely Price in One Year's Time:

Ticker:

$81.76

Likely Trading Range Today Under (Normal Volatility)

$76.4

Price Upper limit ($) :

$77.22

Price Lower limit ($) :

Crash Risk Prep/Key Price Levels (High Volatility/Risk)

Price, as per data analysis, isn't likely to fall below:

Today:

$71.84

This week:

$65.75

This month :

$54.72

Other Primary facts

Market Cap:

9.46B

Market Cap Classification:

Mid Cap

Number of Shares

IPO Date:

123.47M

Best/Worst Daily Performance (Last 3+ Years)

Highest Daily Appreciation:

27.99%

-15.04%

Worst Daily Decline:

Our Options Trading Entry Points

Iron Condor entry points for options expiring in 1 week's time

Low risk (<2%) entry points

Buy Call:

Sell Call:

Buy Put:

Sell Put:

$99.65

$89.15

$53.89

$64.39

Medium risk (<10%) entry points

Buy Call

Sell Call

$85.74

Buy Put:

Sell Put:

$83.49

$67.78

$70.05

These entry points can be used for other strategies, such as butterflies, straddles, etc.

Risk-Adjusted returns (Sharpe Ratio) of

ZEN

Sharpe Ratio:

1.50%

Comparison:

ZEN, is amongst the top 60% stocks with highest risk-adjusted returns

Sharpe ratio is 55.19% higher than the industry

& is -34.37% lower than the market/S&P 500 average

Average Returns/Yield of

ZEN

Daily returns:

0.06%

Weekly returns:

0.28%

Monthly returns:

1.12%

Yearly returns:

9.94%

Comparison of returns:

Average annual returns/yield (last 3 years) is 35.33% above industry average

Classification:

ZEN, is amongst the top 40% highest yielding stocks in terms of daily returns

Results of T-Test of Returns:

0.97

Statistical test of Returns:

ZEN has not yielded statistically significant higher returns when compared to the market

Volatility (measured by Standard Deviation)

Daily Volatility:

3.15%

Weekly Volatility:

7.05%

Monthly Volatility:

14.11%

Yearly Volatility:

48.87%

Volitlilty of last five days (Measured by Standard Deviation)

Average Volatility of this Week:

0.32%

Volatility in last five trading days has been -89.81% below long-term volatility

Value at Risk Analysis (VaR)

Daily VaR:

-6.42%

Weekly VaR:

-14.36%

Monthly VaR:

-28.72%

How Much Can the price of

ZEN

Decline in a Recession?

Likely price decline in a recession:

Base case (decline):

-25%

Worst case (decline):

>85%

This translates to price declining to:

$57.76

This translates to price declining to:

$11.52

Severe Crash Probability

Risk of crash in next 6/12 months: High (50-70%)

What is Value at Risk (VaR)?

Risk Fundamentals

ZEN is a 102.72% riskier investment compared to the market/S&P 500 & is 73.67% riskier than Nasdaq (IXIC)

Risk (measured by volatility) is -12.24% below industry average

Overall, it is amongst the top 50% most risky stocks

Beta Examination of

ZEN

Beta in relation to market/S&P 500--0.97

Expected beta in 1 year's time:

1.027

Expected beta in 3 year's time:

1.452

Unlevered (debt free) Beta:

0.202

Beta in relation to Nasdaq (XNAS):

1.066

Beta in relation to all global stocks::

0.759

Beta Comparison & Analysis

Beta of competitors/peers::

1.333

Beta is -27.47% lower than peers

Average Industry Beta:

1.335

Beta is -27.62% below industry average

Sustainable Growth Rate Analysis

Sustainable growth rate for this stock/firm:

Alpha provided | Alpha Analysis

Alpha provided:

0.037

Alpha is -255.75% below industry average alpha yield

Alpha is 234% higher than market/& is unsustainably high

Analysis of Cost of Capital of

ZEN

Equity cost of capital:

0.098

Equity cost of capital is -20.55% below industry mean WACC

Unlevered (without debt) cost of capital:

2.04%

Before-tax cost of debt:

3.48%

After-tax cost of debt:

2.75%

Overall debt rating:

High AA grade (second highest grade)

Weighted average cost of capital (WACC):

2.75%

WACC is -35.49% below industry mean WACC

Key Per-Share Metrics & Analysis

Revenue per share:

$11.57

Revenue growth rate per share of (3Y):

28.98

Annual revenue growth rate is -13.26% below industry average

EPS:

-$2.00

Expected Annual growth rate of EPS (3Y):

6.92%

Expected future EPS growth rate is -74.71% lower than the Software�Application industry

Free cash flow (FCF) per share:

$0.95

Debt per share

$9.68

EBITDA per share

-$1.19

Valuation Analysis Today of

ZEN

P/E Ratio:

P/E Ratio of Competitors/Peers:

16.13

P/E ratio is -100.00% lower than main peers & is higher than the industry

ZEN is -121.61% undervalued if valued using industry average P/E ratio

P/S (Price to Sales ratio):

6.63

Price to sales ratio is -42.17% below the industry mean

P/B (Price to book value ratio):

28.98

Price to free cash flow: 81.07

Price to free cash flow ratio is -1.41% lower than the industry

Net income growth rate (3Y):

56.29%

Net income growth rate is -76.95% lower than the industry average net income growth rate

Dividend Analysis

Dividend History:

--$0.00

In-depth Debt & Leverage Analysis

Debt to equity ratio:

365.50%

Net debt to equity ratio:

265.52%

Debt to assets ratio:

49.04%

Net debt to assets ratio:

35.63%

Debt-to-asset ratio is -10.61% below industry average

Ability to repay debt:

Interest coverage ratio:

-3.1

Interest coverage ratio is -105.84% less than industry average

Looking forward:

Debt growth rate:

10.27%

Annual debt growth is -99% lower than industry average debt growth rate

Debt repayment rate in last quarter: 0.00%

Analysis of Key Statistics

Correlation of price movement with the market:

0.568

Statistical significance of correlation:

ZEN has a statistically significant correlation with the market

Average Correlation of the industry with the market:

0.503

Stock price is 13.00% more correlated with the market, compared to the industry average correlation

R Squared (percentage of price movement explained by movement of the market):

0.503

Correlation of price movement with Nasdaq (^IXIC):

-0.027

Covariance of price movement with the market:

-0.05

Kurtosis

12.515

Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns

Skewness of returns:

0.487

Returns are, approximately, symmetrical

Fundamental Analysis & Dupont Analysis of

ZEN

Gross Profit Margin Ratio:

319%

Operating Profit Margin Ratio:

-13.30%

Operating profit margin is -30.59% lower than the industry

Net Profit Margin Ratio:

319%

Effective Tax Rate:

-3.67%

Effective tax rate is -113.92% lower than the industry

Dupont Method

Net Profit Margin

Return on Equity Ratio (ROE):

ROA

-73.87%

Return on equity (ROE) is 464.79% higher than the industry

Financial Leverage

Asset Turnover Ratio (ROA):

-9.91%

Return on assets (ROA) is 158.08% higher than the industry

Financial Leverage:

2.0x

Current Ratio:

1.62

Current ratio is -45.82% below industry average

Cash Conversion Cycle (days):

9.3

Cash conversion cycle is -90.15% below industry average

The remaining useful life of property plant & equipment is: 3.3 years

Stock based compensation to net income ratio:

-26.46%

In-depth Efficiency Analysis

Revenue generated per employee:

218.5K

Each employee generates -37% less revenue than industry average revenue per employee

EBITDA generated per employee:

- 22.5K

Each employee generates -309% less EBITDA than industry average revenue per employee

Profit generated per employee:

- 36.9K

Each employee generates 112% more net income/profit than industry average revenue per employee

Free cash flow (FCF) generated per employee:

0.1K

Each employee generates -101% less free cash flow than industry average revenue per employee

Assets/Capital per employee

147.5K

Each employee generates -101% less free cash flow than industry average revenue per employee

Research & Development (R&D) Analysis

Research & development (R&D) investment growth rate-- 37.84%

Growth rate in R&D investment/expenditure is 2375.16% higher than the industry

Competitors/Peer firms of

ZEN

SENTINELONE, INC. (XNYS:S)

FAIR ISAAC CORPORATION (XNYS:FICO)

SAMSARA INC. (XNYS:IOT)

ASANA, INC. (XNYS:ASAN)

CIENA CORPORATION (XNYS:CIEN)

Wolfspeed, Inc. (XNYS:WOLF)

JUNIPER NETWORKS, INC. (XNYS:JNPR)

GODADDY INC. (XNYS:GDDY)

LEIDOS HOLDINGS, INC. (XNYS:LDOS)

Current Analyst Ratings

Strong buy�21%

Buy�50%

Hold�8%

Sell�4%

Strong sell�0%

Overall analyst sentiment is: Buy

Income Statement

Period:

TTM

Date:

3/31/22

Revenue:

1.43B

Cost of Revenue:

Gross Profit:

R&D Expense

General & Admin Expenses:

Selling, General & Admin Expenses

Sales and Marketing Expenses

Other Expenses :

Operating Expenses :

Cost & Expenses :

Interest Income:

Interest Expenses:

Depreciation & Amortization:

EBITDA:

Operating Income:

Other Income Expenses:

Income Before Tax:

Income Tax Expense:

Net Income:

Balance Sheet

Date:

Calendar Year:

Period:

Cash & Cash Equivalents:

Short Term Investments:

Cash & Short Term Investments:

Net Receivables:

Inventory:

Other Current Assets:

Total Current Assets:

PP&E:

Goodwill:

Intangible Assets:

Long Term Investments:

Tax Assets:

Other Non-Current Assets:

Total Non-Current Assets:

Other Assets:

Total Assets:

Accounts Payable:

Short Term Debt:

Tax Payables:

Deferred Revenue:

Other Current Liabilities:

Total Current Liabilities:

Long Term Debt:

Other Non-Current Liabilities:

Total Non Current Liabilities:

Other Liabilities:

Total Liabilities:

Common Stock:

Retained Earnings:

Accumulated Other Comprehensive Loss:

Other Total Stockholders' Equity:

Total Stockholders' Equity:

Total Liabilities and Stockholders' Equity:

Total Investments:

Total Debt:

Net Debt:

289.67M

1.14B

386.34M

218.96M

942.90M

723.94M

1.33B

4.39M

47.43M

38.41M

- 147227.00K

- 190030.00K

- 241625.00K

- 233066.00K

8.56M

- 241625.00K

Statement of Cash Flow

Date:

Period:

10.32M

Differed Income Tax :

Stock Based Compensation :

63.94M

Change in Working Capital :

- 22767.00K

Accounts Receivables:

47.99M

Other Working Capital:

- 42117.00K

Other Non-Cash Items:

26.67M

Net Cash Provided by Operating Activities:

11.21M

Investments in PP&E:

- 7438.00K

Net Acquisitions:

Purchases of Investments:

- 166206.00K

Sales/Maturities of Investments:

Other Investing Activities:

Net Cash Used for Investing Activities:

Debt Repayment:

Common Stock Issued:

Common Stock Repurchased:

Dividend Paid:

Other Financing Activities:

Net Cash Used Provided by Financing Activities:

Effect of FOREX on Changes in Cash:

Net Changes in Cash:

Cash at End of Period:

Cash at Beginning of Period:

Operating Cash Flow:

Capital Expenditure:

Free Cash Flow (FCF):

3/31/22

2022

496.04M

602.59M

1.10B

224.15M

150.27M

1.47B

167.23M

491.68M

110.49M

964.68M

2.44B

31.19M

169.01M

522.53M

184.89M

907.62M

1.20B

3.46M

1.20B

2.11B

1.22M

- 1126075.00K

- 13537.0K

1.47B

March 31, 2022 at 6:00:00 AM

1.62B

327.10M

2.44B

1.09B

1.36B

868.5M

158.09M

- 3016.00K

- 18568.00K

26.95M

- 14.00K

19.58M

496.93M

477.35M

11.21M

- 10454.00K

758.00K

Our Proprietary Portfolio Rating

Our Rating:

Price Forecast/Expected Price in Next 5 Years of

ZEN

2023

2024

2025

2026

2027

$62.91

$67.00

$71.35

$75.99

$80.92

RISK CONCERN

​Investment Strategy, Risk Analysis, and Insights by Chartered Professionals

Zendesk, Inc. (XNYS:ZEN) In-Depth Stock/Fundamental/Options Analysis Today

Primary Facts

Our Technological Advancement Rating

Primary Targets/Price Insights

Likely Trading Range Today Under (Normal Volatility)

Crash Risk Prep/Key Price Levels (High Volatility/Risk)

Other Primary facts

Best/Worst Daily Performance (Last 3+ Years)

Our Options Trading Entry Points

Risk-Adjusted returns (Sharpe Ratio) of

ZEN

Average Returns/Yield of

ZEN

Volatility (measured by Standard Deviation)

Volitlilty of last five days (Measured by Standard Deviation)

Value at Risk Analysis (VaR)

How Much Can the price of

ZEN

Decline in a Recession?

Severe Crash Probability

What is Value at Risk (VaR)?

Risk Fundamentals

Beta Examination of

ZEN

Beta Comparison & Analysis

Sustainable Growth Rate Analysis

Alpha provided | Alpha Analysis

Analysis of Cost of Capital of

ZEN

Key Per-Share Metrics & Analysis

Valuation Analysis Today of

ZEN

Dividend Analysis

In-depth Debt & Leverage Analysis

Analysis of Key Statistics

Fundamental Analysis & Dupont Analysis of

ZEN

In-depth Efficiency Analysis

Research & Development (R&D) Analysis

Competitors/Peer firms of

ZEN

Current Analyst Ratings

Income Statement

Balance Sheet

Statement of Cash Flow

Our Proprietary Portfolio Rating

Price Forecast/Expected Price in Next 5 Years of

ZEN

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