[Truncated from the Portfolio Update article in the 6/16/2015 issue of Smart Tech Investor]

The role of customer service is evolving. Zendesk (ZEN), provider of a cloud-based customer service software platform, is one promising vendor leading the charge to improve how businesses interact with their customers. I am adding Zendesk to the Next Wave Portfolio because the company has a growing presence within the small and midsize business (SMB) market and is now aggressively expanding into the larger enterprise segment. Given Zendesk’s current business momentum, I believe the company next year is capable of expanding the top line faster than the latest consensus growth rate estimate of 36.7%. My fair-value price target of $30.55 is derived from applying a forward multiple of 8.5 to a 2016 revenue estimate of $273 million (growth of 40%).

We are adding Zendesk to the Next Wave Portfolio with a buy limit of $25, and a stop loss of $19.50.