Why Zendesk Stock Jumped 52% in the First Half of 2019

What happened

Shares of customer service platform Zendesk (NYSE: ZEN) have skyrocketed in 2019, rising 52.5% during the first half of the year, according to data provided by S&P Global Market Intelligence .

The stock's gain has been driven primarily by Zendesk's impressive business performance this year. But overall strength in technology stocks throughout 2019 has contributed to Zendesk's rise, too.

Zendesk support dashboard metrics

Zendesk support dashboard metrics. Image source: Zendesk.

So what

Providing underlying support for Zendesk stock throughout 2019 has been a bullish run for technology stocks. The tech-heavy NASDAQ Composite index rose 21% during the first six months of the year, outperforming the S&P 500 's 17% gain over the same time frame.

More importantly, however, Zendesk has seen strong growth in its business. Shares surged 15% in a single day in February when Zendesk said its fourth-quarter revenue increased 41% year over year -- an acceleration from 38% growth in the prior quarter. Strong performance persisted in the company's first quarter of 2019 , when revenue jumped 40% year over year.

Now what

Management expects Zendesk's momentum to continue. In the company's most recent quarterly update, management said it expected full-year revenue to be between $802 million and $810 million. The midpoint of this guidance range implies 35% year-over-year growth. Before Zendesk's first-quarter update, management was expecting full-year revenue to be between $795 million and $805 million.

Importantly, Zendesk expects full-year free cash flow to be between $55 million and $65 million, up from $36 million in 2018.

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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Zendesk. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance , Stocks
Referenced Symbols: ZEN

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