Zendesk (ZEN) To Report Earnings Tomorrow: Here Is What To Expect

Radek Strnad /
2022/07/27 4:48 am EDT

Customer service software maker Zendesk (NYSE:ZEN) will be announcing earnings results tomorrow afternoon. Here's what to look for.

Last quarter Zendesk reported revenues of $388.3 million, up 30.2% year on year, beating analyst revenue expectations by 1.03%. It was a decent quarter for the company, with a strong top line growth.

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 27.1% year on year to $404.6 million, in line with the 29% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.12 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 1.75%.

Looking at Zendesk's peers in the sales and marketing software segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. Squarespace delivered top-line growth of 8.51% year on year, beating analyst estimates by 0.32% and Qualtrics reported revenues up 42.9% year on year, exceeding estimates by 3.34%. Squarespace traded flat on the results, and Qualtrics was down 5.24%. Read our full analysis of Squarespace's results here and Qualtrics's results here.

The whole tech sector has been facing a sell-off since late last year and while some of the sales and marketing software stocks have fared somewhat better, they have not been spared, with share price declining 10.6% over the last month. Zendesk is up 0.62% during the same time, and is heading into the earnings with analyst price target of $82.4, compared to share price of $74.01.

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.