As of May 27, 2025, Zendesk Inc has a Discounted Cash Flow (DCF) derived fair value of $0.00 per share. With the current market price at $77.48, this represents a potential upside of -246.2%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $0.00 |
| DCF Fair Value (10-year) | $0.00 |
| Potential Upside (5-year) | -209.7% |
| Potential Upside (10-year) | -246.2% |
| Discount Rate (WACC) | 7.5% - 9.9% |
Revenue is projected to grow from $1339 million in 12-2021 to $8783 million by 12-2031, representing a compound annual growth rate of approximately 20.7%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2021 | 1339 | 30% |
| 12-2022 | 1665 | 24% |
| 12-2023 | 2089 | 25% |
| 12-2024 | 2746 | 31% |
| 12-2025 | 3389 | 23% |
| 12-2026 | 4052 | 20% |
| 12-2027 | 4959 | 22% |
| 12-2028 | 5949 | 20% |
| 12-2029 | 6885 | 16% |
| 12-2030 | 7788 | 13% |
| 12-2031 | 8783 | 13% |
Net profit margin is expected to improve from -17% in 12-2021 to -10% by 12-2031, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2021 | (224) | -17% |
| 12-2022 | (246) | -15% |
| 12-2023 | (288) | -14% |
| 12-2024 | (354) | -13% |
| 12-2025 | (408) | -12% |
| 12-2026 | (455) | -11% |
| 12-2027 | (549) | -11% |
| 12-2028 | (650) | -11% |
| 12-2029 | (742) | -11% |
| 12-2030 | (827) | -11% |
| 12-2031 | (920) | -10% |
with a 5-year average of $36 million. Projected CapEx is expected to maintain at approximately 5% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2022 | 48 |
| 12-2023 | 59 |
| 12-2024 | 77 |
| 12-2025 | 102 |
| 12-2026 | 136 |
| 12-2027 | 168 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 67 |
| Days Inventory | 0 |
| Days Payables | 49 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 3M/2022 | (36) | (2) | 20 | 10 | (64) |
| 2023 | (159) | (8) | 102 | 94 | (346) |
| 2024 | (185) | (10) | 133 | 106 | (415) |
| 2025 | (191) | (11) | 165 | 108 | (452) |
| 2026 | (181) | (13) | 197 | 125 | (490) |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 0.00 | -209.7% |
| 10-Year DCF (Growth) | 0.00 | -246.2% |
| 5-Year DCF (EBITDA) | 0.00 | -100.0% |
| 10-Year DCF (EBITDA) | 0.00 | -100.0% |
Is Zendesk Inc (ZEN) a buy or a sell? Zendesk Inc is definitely a sell. Based on our DCF analysis, Zendesk Inc (ZEN) appears to be overvalued with upside potential of -246.2%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider reducing exposure at the current market price of $77.48.