Sam Boughedda

Investing.com — Zendesk Inc (NYSE: stock fell Friday after the company revealed on Thursday evening that it will acquire Momentive Global Inc (NASDAQ:) in a deal valued at around $4 billion. 

Analysts responded to this by downgrading Zendesk stock and reducing their price targets. 

Momentive shareholders receive 0.225 Zendesk share for every Momentive share they have, which equates to an average value of $4.1 billion on the basis of Thursday’s closing prices.

Both companies anticipate closing the deal in the first quarter of next year. Zendesk indicated that the acquisition will boost Zendesk’s revenue in its first year of operation. Momentive changed its name to SurveyMonkey in June. It is anticipated that the deal will accelerate Zendesk’s growth plan to $3.5Billion in 2024. 

Jefferies reacted to this news and downgraded Zendesk shares from buy to hold, reducing the price target from $175 to $120.

Oppenheimer downgraded Zendesk’s performance to outperform.

Bank of America reduced the stock’s value to neutral, from buy.

Craig-Hallum Reduced Momentive to Hold from Buy with a $28 Price Target. Zendesk’s price target was also decreased to $150 from $185. They maintained a Buy rating.

Stan Zlotsky from Morgan Stanley, an analyst for Zendesk, reduced Zendesk’s target price to $135, down from $185. Stan stated that Zendesk’s “large and unexpected” deal with a slower-growing company outweighed its Q3 results which were above expectations.

Zendesk shares have not performed well in 2021. They are currently at 30%, with a current 100.96 price.