What To Expect From Zendesk’s (ZEN) Q1 Earnings

Adam Hejl /
2022/04/27 8:20 am EDT

Customer service software maker Zendesk (NYSE:ZEN) will be announcing earnings results tomorrow after market hours. Here's what investors should know.

Last quarter Zendesk reported revenues of $375.3 million, up 32.4% year on year, beating analyst revenue expectations by 1.5%. It was a decent quarter for the company, with a strong top line growth and guidance for the next quarter roughly in line with what analysts' expectations.

Is Zendesk buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Zendesk's revenue to grow 29% year on year to $384.6 million, improving on the 25.5% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.15 per share.

Zendesk Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 1.66%.

Looking at Zendesk's peers in the sales and marketing software segment, only Qualtrics has so far reported results, delivering top-line growth of 40.6% year on year, and beating analyst estimates by 3.06%. The stock was up 4.31% on the results. Read our full analysis of Qualtrics's earnings results here.

Technology stocks have been hit hard on fears of higher interest rates and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 12.2% over the last month. Zendesk is up 1.45% during the same time, and is heading into the earnings with analyst price target of $140.8, compared to share price of $123.08.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.