Head to Head Review: Zendesk (ZEN) and Mulesoft (MULE)

Mulesoft (NYSE: MULE) and Zendesk (NYSE:ZEN) are both mid-cap technology companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, dividends and valuation.

Earnings and Valuation

This table compares Mulesoft and Zendesk’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mulesoft $187.74 million 16.53 -$49.59 million ($0.72) -33.17
Zendesk $430.49 million 9.22 -$103.79 million ($1.11) -35.23

Mulesoft has higher earnings, but lower revenue than Zendesk. Zendesk is trading at a lower price-to-earnings ratio than Mulesoft, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

24.4% of Mulesoft shares are held by institutional investors. Comparatively, 93.9% of Zendesk shares are held by institutional investors. 5.3% of Zendesk shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Mulesoft and Zendesk, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mulesoft 0 3 8 0 2.73
Zendesk 0 2 13 0 2.87

Mulesoft presently has a consensus price target of $28.00, suggesting a potential upside of 17.25%. Zendesk has a consensus price target of $40.43, suggesting a potential upside of 3.40%. Given Mulesoft’s higher possible upside, equities research analysts clearly believe Mulesoft is more favorable than Zendesk.

Profitability

This table compares Mulesoft and Zendesk’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mulesoft -25.84% -49.63% -18.06%
Zendesk -25.70% -32.88% -19.76%

Summary

Zendesk beats Mulesoft on 7 of the 13 factors compared between the two stocks.

About Mulesoft

MuleSoft, Inc. is engaged in providing a software platform that connects a range of technologies. The Company enables organizations to manage and secure the flow of data between all systems in the enterprise. The Company offers organizations to create agile infrastructures. The Company has developed Anypoint Platform. The Company’s customers use its Anypoint Platform to connect their applications, data, and devices into an application network where systems are pluggable instead of glued together with custom integration code. The application network enables a self-serve infrastructure through discoverable building blocks, or nodes, that can be used and reused to rapidly compose applications. With an application network built with Anypoint Platform, organizations can transform into composable enterprises.

About Zendesk

Zendesk, Inc. (Zendesk) is a software development company. The Zendesk family of products is built to work together to help organizations understand and manage customer relationships. All Zendesk products share a common interface and are being developed to support a shared services infrastructure and common customer data platform. Zendesk’s products are developed using agile software techniques, and are designed to incorporate and innovate on customer feedback obtained through beta and Early Access Programs (EAPs). Its family of products includes Zendesk Support, Zendesk Chat, Zendesk Talk, Zendesk Help Center, Zendesk Message, Zendesk Explore and Zendesk Connect. Zendesk’s developer platform allows organizations to extend the functionality of its family of products and customize the experience for their employees and customers. Key components of Zendesk’s developer platform include Zendesk Embeddables, Zendesk application program interfaces (APIs) and Zendesk Applications.

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