Workday (NASDAQ:WDAY) and Zendesk (NYSE:ZEN) are both large-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, profitability, analyst recommendations, earnings and risk.
Earnings and Valuation
This table compares Workday and Zendesk's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Workday | $3.63 billion | 16.22 | $-480,670,000.00 | ($1.42) | -172.66 |
Zendesk | $816.42 million | 21.08 | $-169,650,000.00 | ($1.19) | -122.81 |
Zendesk has lower revenue, but higher earnings than Workday. Workday is trading at a lower price-to-earnings ratio than Zendesk, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Workday and Zendesk's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Workday | -10.77% | -10.56% | -3.90% |
Zendesk | -19.24% | -22.55% | -6.13% |
Volatility & Risk
Workday has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500. Comparatively, Zendesk has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500.
Insider & Institutional Ownership
68.0% of Workday shares are held by institutional investors. Comparatively, 97.4% of Zendesk shares are held by institutional investors. 26.5% of Workday shares are held by insiders. Comparatively, 4.3% of Zendesk shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Analyst Recommendations
This is a summary of current recommendations and price targets for Workday and Zendesk, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Workday | 1 | 10 | 20 | 0 | 2.61 |
Zendesk | 0 | 3 | 12 | 0 | 2.80 |
Workday currently has a consensus price target of $257.3103, indicating a potential upside of 4.95%. Zendesk has a consensus price target of $143.00, indicating a potential downside of 2.15%. Given Workday's higher probable upside, analysts plainly believe Workday is more favorable than Zendesk.
Summary
Workday beats Zendesk on 8 of the 14 factors compared between the two stocks.