Earnings Preview for Zendesk

Zendesk ZEN announces its next round of earnings this Thursday, April 29. Here is Benzinga's look at Zendesk's Q1 earnings report.

Net Income, Earnings, And Earnings Per Share

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Analysts expect Zendesk earnings of $0.12 per share. Revenue will likely be around $294.70 million, according to the consensus estimate. Zendesk EPS in the same period a year ago totaled $0.1. Revenue was $237.47 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

The Wall Street estimate would represent a 20.0% increase in the company's earnings. Sales would be have grown 24.1% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of Zendesk were trading at $153.47 as of April 27. Over the last 52-week period, shares are up 100.33%. Given that these returns are generally positive, long-term shareholders can be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Zendesk is scheduled to hold the call at 17:00:00 ET and can be accessed here.