In this clip from THE PITCH, we give you an inside look at how a research analyst's high-conviction stock idea becomes a manager's winning position.
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Ami Joseph: "Today we've got Zendesk (ZEN) for you. Essentially, Zendesk has gotten a second lease on life over the last year. If you boil this pitch down to one thing, that's it: a second lease on life on a re-accelerating adoption curve.
To give you the quick hits on our thesis: Zendesk is a company that provides software for customer support and ticketing world. Every agent in customer support needs to have some kind of ticketing software to track and monitor the issues that come through, so that the issues can be resolved. Basically any company that has customers, has to have some kind of customer support software.
Zendesk has been extremely strong in the category that is greater than 100 employees, but less than 10,000 employees - that's been their bread and butter. They've also been very strong in the area of companies who are digital commerce-native. We went long Zendesk in January; we looked at Zendesk a year ago, on a lag from the start of Covid, we saw such a massive increase in the data to the point where we thought maybe our data was wrong.
We backed it up with field notes and multiple field checks which surveyed the landscape of users and professional service installers (people who do the upgrades and customization) to see what was happening, and they literally fit hand and glove.
The growth rate for this year is going to be much stronger than the Street has it modeled right now. As the software world has gone, if you're growing faster than people think, your multiple will also go up."
"We're at +40% YoY revenue growth for $ZEN in 2021. The Street is only at +26%."
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The Call is our morning research call hosted by Hedgeye CEO Keith McCullough with our 40+ analyst research team. It helps small and large investors alike make better decisions via unique and investable stock/sector updates. Click here to learn more.