Pacific Crest: Zendesk Beefing Up Sales Staff, Hiking Prices

Zendesk Inc (NYSE: ZEN) is beefing up its sales staff and boosting prices in a trend that could bear fruit within 18 months, an analyst said Monday.

Pacific Crest's Brendan Barnicle maintained an Outperform rating and $30 target on the customer service software developer, which is slated to post fourth-quarter results after the bell February 11.

Zendesk, up more than 80 percent since its initial public offering in May, fell 5.5 percent recently to $24.49 on little news.

Barnicle expects the company's annual revenue will increase by 35 percent or more for each of the next three years.

The company will also become breakeven point on a free cash flow basis by 2017, according to the analyst.

In the recent period ended September 30, revenue grew 76 percent to $33.9 million, while its loss widened to $17.92 a share, from $4.77.

Growth in average selling prices and new customer accounts are "trending well ahead of our expectations," Barnicle said.