Marketo (NASDAQ: MKTO) and Zendesk (NYSE:ZEN) are both technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, dividends, profitability, valuation, institutional ownership and earnings.

Insider & Institutional Ownership

95.7% of Zendesk shares are owned by institutional investors. 5.3% of Zendesk shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Marketo N/A N/A N/A ($1.70) -20.74
Zendesk $312.00 million 11.87 -$103.79 million ($1.10) -33.17

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

Profitability

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

Net Margins Return on Equity Return on Assets
Marketo -23.20% -98.33% -27.18%
Zendesk -27.43% -32.50% -19.75%

Analyst Recommendations

This is a summary of current ratings and target prices for Marketo and Zendesk, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marketo 0 0 0 0 N/A
Zendesk 1 1 11 0 2.77

Zendesk has a consensus target price of $34.33, suggesting a potential downside of 5.91%. Given Zendesk’s higher probable upside, analysts clearly believe Zendesk is more favorable than Marketo.

Summary

Zendesk beats Marketo on 8 of the 10 factors compared between the two stocks.

Marketo Company Profile

Marketo, Inc. is a United States-based provider of a cloud-based Engagement Marketing software platform, which enables organizations to involve in engagement marketing. The Company’s platform offers a range applications across various categories, including Marketing Automation, which helps to organize personalized multi-channel marketing campaigns and workflows; Email Marketing, which provides the ability to tap the insights captured in the Audience Hub to send e-mail messages; Mobile Engagement, which engages customers on their mobile devices; Digital Ads, which allows marketers to focus on behavioral data captured in the Audience Hub for personalized digital advertisements; Web Personalization, which helps in personalizing experiences to engage people; Marketing Analytics; Predictive Content, which discovers Website assets, such as e-books and case studies; Marketing Calendar, and Sales Insight. It offers solutions, such as Lead Management solution and Consumer Marketing solution.

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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