Zendesk (ZEN) popped in high volume Wednesday as the software provider showed it picked up momentum against rival Salesforce.com (CRM) in reporting first-quarter results.
XZendesk late Tuesday reported adjusted income of 2 cents a share, swinging to a profit from a 5-cent loss a year earlier. Revenue jumped 38% to $130 million. Analysts estimated a loss of 3 cents a share on revenue of $126.4 million.
For the June quarter, the software maker forecast revenue of $137 million vs. estimates of $134 million. Shares popped 7.3% to close at 52.12 on the stock market today. With Wednesday's gain, Zendesk stock has shot up 53% in 2018.
"The Q1 top-line beat was driven in large part by momentum in the company's enterprise business," William Blair analyst Bhavan Suri said in a note to clients.
Price Target Hikes
Meanwhile, KeyBanc Capital Markets, Piper Jaffray and RBC Capital all hiked their price targets on the company following its earnings report.
"We are raising estimates on enterprise traction, cross-sell opportunities, and improving sales productivity," KeyBanc analyst Brent Bracelin said in his report to clients.
Piper Jaffray's Alex Zukin said in his note: "Enterprise business success continues to fuel outperformance."
San Francisco-based Zendesk sells customer-support and sales automation software. It aims to sell more to larger companies and enterprises, as well as to its longtime base of smaller and midsize businesses.
Aside from competing in the high-end of the market vs. Salesforce.com, Zendesk also competes against Freshdesk, Desk.com, and others.
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The post Zendesk Earnings Beat, Gains Vs. Salesforce.com In Enterprise appeared first on Investor's Business Daily.
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