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Zendesk (ZEN) to Report Q1 Earnings: What's in the Cards?

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Zendesk (ZEN - Free Report) is set to release first-quarter 2019 results on Apr 30.

Notably, the company has surpassed the Zacks Consensus Estimate in the trailing four quarters, the average beat being 175%.

In the last reported quarter, Zendesk reported earnings of 10 cents per share that beat the Zacks Consensus Estimate by 7 cents. Revenues of $172.2 million also surpassed the consensus mark of $166 million.

For first-quarter 2019, revenues are anticipated between $178 million and $180 million. The Zacks Consensus Estimate for revenues currently stands at $179.6 million, indicating growth of 38.4% from the year-ago quarter’s reported figure.

Moreover, the consensus mark for earnings has remained steady at 3 cents per share over the past 30 days, implying growth of 50% from the figure reported in the year-ago period.
 

Zendesk, Inc. Price and EPS Surprise

Zendesk, Inc. Price and EPS Surprise | Zendesk, Inc. Quote

 

Let’s see how things are shaping up for this announcement.

Factors to Watch

Zendesk is gaining momentum on strong adoption of its customer relationship management (CRM) solutions. The company continues to add features to its enterprise products.

Moreover, strong demand for Zendesk Suite, a bundled subscription-based product, is a key catalyst. The solution has been gaining traction not only among small and medium businesses (SMBs) but also among enterprises. Additionally, the company’s new CRM platform Zendesk Sunshine is also a key catalyst. These are expected to drive the top line in the to-be-reported quarter.

Further, Zendesk has been focusing on gaining enterprise customers rapidly. To achieve this, the company strengthened its executive suite in February.

Elisabeth Zornes, former general manager of global support for Microsoft Office, was appointed as Zendesk’s first chief customer officer. While former Adobe executive, Colleen Berube, was appointed as the chief information officer, Shawna Wolverton, former Salesforce executive, was appointed as the senior vice president, product.

Moreover, Zendesk’s growing footprint in the Asia-Pacific, particularly in Australia and New Zealand (ANZ), is a key catalyst. The company has appointed Amy Foo as Managing Director of the ANZ region.

Zendesk’s focus on expanding its international footprint is expected to drive the top line in first-quarter 2019.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Zendesk has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are some stocks you may want to consider, as our model shows these have the right combination of elements to post an earnings beat.

Synopsis (SNPS - Free Report) has an Earnings ESP of +1.15% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Intuit (INTU - Free Report) has an Earnings ESP of +1.49% and a Zacks Rank #2.

Sapiens International (SPNS - Free Report) has an Earnings ESP of +6.67% and a Zacks Rank #2.

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