Comparing Zendesk (ZEN) and Perion Network (PERI)

Zendesk (NYSE: ZEN) and Perion Network (NASDAQ:PERI) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Insider & Institutional Ownership

96.0% of Zendesk shares are owned by institutional investors. Comparatively, 19.4% of Perion Network shares are owned by institutional investors. 5.3% of Zendesk shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Zendesk and Perion Network’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Zendesk $363.62 million 8.39 -$86.63 million ($1.10) -27.60
Perion Network $290.67 million 0.32 $24.96 million ($0.42) -2.83

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Zendesk and Perion Network, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zendesk 1 1 11 0 2.77
Perion Network 0 1 0 0 2.00

Zendesk presently has a consensus target price of $32.18, indicating a potential upside of 6.00%. Given Zendesk’s stronger consensus rating and higher possible upside, research analysts plainly believe Zendesk is more favorable than Perion Network.

Profitability

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

Net Margins Return on Equity Return on Assets
Zendesk -29.34% -32.10% -20.12%
Perion Network -11.31% 8.57% 4.95%

Risk & Volatility

Zendesk has a beta of 1.81, indicating that its share price is 81% more volatile than the S&P 500. Comparatively, Perion Network has a beta of 1.66, indicating that its share price is 66% more volatile than the S&P 500.

Summary

Zendesk beats Perion Network on 8 of the 13 factors compared between the two stocks.

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.

About Perion Network

Perion Network Ltd. is a global technology company. It is engaged in delivering advertising solutions to brands and publishers. It operates through High Impact Advertising solutions segment. It provides execution, ranging from high-impact advertisement formats to branded search, and a unified social and mobile programmatic platform. Its business solutions include Undertone, Codefuel, Growmobile, IncrediMail and Smilebox. Undertone offers engaging digital advertising, which is designed to capture consumer attention and drive engagement, delivering these advertisements across a portfolio of Websites and mobile applications. CodeFuel is an engagement and monetization suite delivering solutions for both content publishers and advertisers. Growmobile offers automated marketing solutions ranging from social advertising to user engagement. IncrediMail is a unified messaging application. Smilebox is a photo sharing and social expression product and offers various formats, themes and styles.

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