5 Best Software Stocks to Buy According to Billionaire Paul Tudor Jones

4. Zendesk, Inc. (NYSE: ZEN)

Value: $7,040,000
Percent of Paul Tudor Jones’ 13F Portfolio: 0.199%
No. of Hedge Fund Holders: 58

Zendesk, Inc. (NYSE: ZEN) is one of the top software stocks to invest in. The stock has a very strong and positive outlook, according to several analysts.

Cowen recently raised the stock’s rating to Outperform and its price target to $195 from $195 after the company’s better-than-projected results for Q1 FY2021. During the quarter, the company reported non-GAAP EPS of $0.17, beating the Street by $0.05.

The company’s revenue during the quarter beat analyst projection by $3.3 million to $298.05 million.

ZEN ranks 4th in the list of best software stocks to buy according to billionaire Paul Tudor Jones.

The company projects its 2021 revenue to range between $317 million and $322 million. Zendesk’s GAAP operating income in 2021 is expected to range between $42 million and $38 million, while non-GAAP operating income will range between $20 million and $24 million. 

Citi also raised its Zendesk, Inc. (NYSE: ZEN) price target from $120 to $187 on a strong earnings report. Zendesk recently announced the appointment of Netflix lead designer Steve Johnson and NBA exec Brandon Gayle to its board.

In its Q4 2020 investor letter, Wasatch Ultra Growth Fund highlighted a few stocks and Zendesk Inc. (NYSE:ZEN) is one of them. Here is what Wasatch said:

“Zendesk, Inc. (ZEN) was also a top contributor. The company provides business software using the software-as-a-service (SaaS) model. Zendesk has experienced strong demand throughout the Covid19 pandemic from customers in e-commerce, as well as from other businesses with employees working from home. Additionally, demand from clients in the travel and hospitality industries has picked up as global economies have begun to reopen. Adjusted earnings per share rose 42% in the company’s most recent quarter on revenue growth of 24% compared to the same quarter a year ago. An improved sales outlook from Zendesk’s management also helped lift the stock.”