NEW YORK (TheStreet) -- Shares of Zendesk (ZEN - Get Report) were gaining 10.7% to $23.31 with heavy trading volume on Wednesday after the cloud software company beat analysts' estimates for earnings in the third quarter.

After the market closed on Tuesday, Zendesk reported a loss of 5 cents a share for the third quarter, beating analysts' estimates of a loss of 9 cents a share. Revenue grew 64.1% year over year to $55.66 million for the quarter, above analysts' estimates of $52.24 million.

"We had an outstanding quarter of financial results and company achievements," Founder, CEO and Chair of the Board of Directors Mikkel Svane said in a statement. "We made major strides in our enterprise business globally, while delivering on our vision for more data-driven customer service and engagement."

Svane continued, "The recent addition of the BIME Analytics team will allow us to build deeper data analytics into more of our products and give organizations a better understanding of their customers."

The company said that customers with 100 or more agents accounted of more than 30% of its recurring revenue at the end of the third quarter.

ZenDesk expects to report revenue of $59 million to $61 million for the fourth quarter, above analysts' estimates of $57.5 million.

About 2.5 million shares of Zendesk were traded by 12:43 p.m. Wednesday, well above the company's average trading volume of about 606,000 shares a day.

TheStreet Ratings team rates ZENDESK INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate ZENDESK INC (ZEN) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

You can view the full analysis from the report here: ZEN

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