UPDATE: Canaccord Genuity Starts Zendesk (ZEN) at Buy

Canaccord Genuity initiated coverage on Zendesk (NYSE: ZEN) with a Buy rating and a price target of $19.00.

Analyst Richard Davis said, "Zendesk is a promising, albeit emerging firm that appears set to continue to rapidly win business with firms looking to deploy what we believe is a best-in- class customer engagement platform. We believe the stock's risk/reward is sufficient to rate the shares BUY."

"Our $19 price target is based on an 8.8x EV/revenue multiple applied to our C2015 estimate of $161M, assuming roughly $55M in prospective net cash and a fully-diluted post-deal share count of 77.3M. This level of target multiple would put ZEN on par with firms like DWRE, NOW and N, which we believe is reasonable, considering we are projecting faster growth for Zendesk, and there is a very high likelihood that the firm executes better than forecast (i.e. upward estimate revisions), at least in the near term. This multiple implies roughly 14% compression from where ZEN shares currently trade on C2014 estimates," he added.

For an analyst ratings summary and ratings history on Zendesk click here. For more ratings news on Zendesk click here.

Shares of Zendesk closed at $15.39 yesterday.

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