ANSYS (NASDAQ: ANSS) and Zendesk (NYSE:ZEN) are both mid-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their profitabiliy, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Valuation and Earnings

This table compares ANSYS and Zendesk’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ANSYS $1.03 billion 10.29 $449.22 million $3.11 40.01
Zendesk $336.55 million 7.63 -$83.71 million ($1.10) -23.58

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

Analyst Ratings

This is a summary of current recommendations and price targets for ANSYS and Zendesk, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ANSYS 2 8 1 0 1.91
Zendesk 0 2 9 0 2.82

ANSYS presently has a consensus price target of $105.75, suggesting a potential downside of 15.01%. Zendesk has a consensus price target of $32.50, suggesting a potential upside of 25.29%. Given Zendesk’s stronger consensus rating and higher probable upside, analysts clearly believe Zendesk is more favorable than ANSYS.

Insider & Institutional Ownership

98.2% of ANSYS shares are held by institutional investors. Comparatively, 92.7% of Zendesk shares are held by institutional investors. 1.3% of ANSYS shares are held by company insiders. Comparatively, 5.3% of Zendesk shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares ANSYS and Zendesk’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ANSYS 26.37% 13.87% 11.06%
Zendesk -29.34% -32.28% -20.50%

Risk & Volatility

ANSYS has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500. Comparatively, Zendesk has a beta of 1.79, indicating that its share price is 79% more volatile than the S&P 500.

Summary

ANSYS beats Zendesk on 8 of the 13 factors compared between the two stocks.

ANSYS Company Profile

ANSYS, Inc. (ANSYS) develops and markets engineering simulation software and services used by engineers, designers, researchers and students across a range of industries and academia, including aerospace and defense, automotive, industrial equipment, electronics, biomedical, energy, materials and chemical processing, and semiconductors. The Company focuses on the development of open and flexible solutions that enable users to analyze designs directly on the desktop, providing a common platform for product development, from design concept to final-stage testing and validation. The Company distributes its ANSYS suite of simulation technologies through a network of independent resellers and distributors, and direct sales offices in various locations. Its product portfolio consists of Simulation Platform: ANSYS Workbench, Structures, Fluids, Electronics, Semiconductors, Multiphysics, AIM, Embedded Software, Systems, Three Dimensional (3-D) Direct Modeling and Academic.

Zendesk Company Profile

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.

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