Zendesk (ZEN) versus Adobe Systems (ADBE) Critical Survey

Zendesk (NYSE: ZEN) and Adobe Systems (NASDAQ:ADBE) are both technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, valuation, profitability, analyst recommendations, dividends, earnings and institutional ownership.


This table compares Zendesk and Adobe Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zendesk -25.70% -32.48% -19.29%
Adobe Systems 23.20% 22.15% 12.93%

Insider and Institutional Ownership

93.2% of Zendesk shares are owned by institutional investors. Comparatively, 87.1% of Adobe Systems shares are owned by institutional investors. 5.3% of Zendesk shares are owned by insiders. Comparatively, 0.3% of Adobe Systems shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Zendesk and Adobe Systems, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zendesk 0 2 12 0 2.86
Adobe Systems 0 7 24 0 2.77

Zendesk presently has a consensus price target of $42.77, indicating a potential downside of 12.23%. Adobe Systems has a consensus price target of $200.39, indicating a potential downside of 8.26%. Given Adobe Systems’ higher probable upside, analysts clearly believe Adobe Systems is more favorable than Zendesk.

Earnings and Valuation

This table compares Zendesk and Adobe Systems’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Zendesk $430.49 million 11.70 -$110.63 million ($1.11) -43.90
Adobe Systems $7.30 billion 14.76 $1.69 billion $3.38 64.63

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

Volatility & Risk

Zendesk has a beta of 1.64, meaning that its stock price is 64% more volatile than the S&P 500. Comparatively, Adobe Systems has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500.


Adobe Systems beats Zendesk on 10 of the 14 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 Adobe Systems

Adobe Systems Incorporated is a software company. The Company offers products and services used by professionals, marketers, knowledge workers, application developers, enterprises and consumers for creating, managing, delivering, measuring, optimizing and engaging with compelling content and experiences. It operates through three segments: Digital Media, Digital Marketing, and Print and Publishing. Its Digital Media segment provides tools and solutions that enable individuals, small and medium businesses and enterprises to create, publish, promote and monetize their digital content. Its Digital Marketing segment provides solutions and services for how digital advertising and marketing are created, managed, executed, measured and optimized. Its Print and Publishing segment addresses market opportunities ranging from the diverse authoring and publishing needs of technical and business publishing to its legacy type and original equipment manufacturer (OEM) printing businesses.

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