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%

RISK CONCERN

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