What To Make Of Zendesk Sales Exec Resigning

William Blair said it is little surprised by Zendesk Inc (NYSE: ZEN)’s recent sales executive changes, as it thought the re-organization was already complete. Now, the brokerage predicts more changes to come as Brian Cox, chief revenue officer, continues to weed out underperforming sales personnel.

On December 2, Zendesk announced the resignation of Marcus Bragg, senior vice president, worldwide sales, and Amanda Kleha, senior vice president, go-to-market strategy. Jaimie Buss is to replace Marcus Bragg with the new title of vice president, sales for the Americas region. There will be no replacement for Amanda Kleha, as that was a temporary role.

Impact Of Exec Departure

“We worry that these changes could cause continued operational disruptions akin to what we saw during the third quarter, but our conversations suggest that the velocity business remains solid, and the enterprise business should improve sequentially,” analyst Bhavan Suri wrote in a note.

Suri, who has an Outperform rating on the stock, however, believes the re-alignment is nearing an end and the sales team going into 2017 should perform well for the customer service software firm.

Meanwhile, Suri’s bullish thesis on the stock is based on multiple growth drivers for the company that should help Zendesk sustain its 30 percent-plus top-line growth over the next few years.

“Zendesk is well positioned to take advantage of the transformation of the customer service industry given its easy-to-use technology and large underpenetrated market opportunity estimated at $8 billion," Suri added.

At last check, shares of Zendesk were down 0.76 percent to $20.90.