_edited.png)
RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
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:
D
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:
0
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
--$0.00
--$0.00
--$0.00
--$0.00
--$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
Q1
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
26.95M
- 14.00K
19.58M
496.93M
477.35M
11.21M
- 10454.00K
758.00K
Our Proprietary Portfolio Rating
Our Rating:
D
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