Analyst Note
| Dan Romanoff, CPA |We are maintaining our fair value estimate of $153 per share for narrow-moat Zendesk following its investor day. While management did not shy away from skepticism surrounding the company’s recently announced deal to acquire Momentive, the most immediately impactful news was the initial outlook for 2022, which relative to Factset consensus, was ahead on revenue and light on operating margin. Adjusting our model for higher growth versus lower margins results in no change to our fair value estimate. We see possible revenue upside and additional margin pressure resulting from the Momentive acquisition over the next several years having a tug of war with our model assumptions and see our very high uncertainty rating as particularly relevant right now.