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Spotting Winners: Zuora (NYSE:ZUO) And Finance and HR Software Stocks In Q1


Radek Strnad /
2022/07/07 4:16 am EDT
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The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how Zuora (NYSE:ZUO) and the rest of the finance and HR software stocks fared in Q1.

Organizations are constantly looking to improve organizational efficiencies, whether it is financial planning, tax management or payroll. Finance and HR software benefit from the SaaS-ification of businesses, large and small, who much prefer the flexibility of cloud-based, web-browser delivered software paid for on a subscription basis than the hassle and expense of purchasing and managing on-premise enterprise software.

The 17 finance and HR software stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 3.17%, while on average next quarter revenue guidance was 2.1% above consensus. There has been a stampede out of high valuation technology stocks, but finance and HR software stocks held their ground better than others, with share price down 1.72% since earnings, on average.

Slowest Q1: Zuora (NYSE:ZUO)

Founded in 2007, Zuora (NYSE:ZUO) offers software as a service platform that allows companies to bill and accept payments for recurring subscription products.

Zuora reported revenues of $93.1 million, up 16% year on year, beating analyst expectations by 1.03%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and decelerating growth in large customers.

“Our first quarter continued to demonstrate the resilience of the recurring revenue model, and our unique ability to provide a complete quote to cash and revenue recognition process at scale. We exceeded guidance for total revenue and subscription revenue. Long-term trends continue to support the broadening Subscription Economy and we delivered another quarter of consistent execution,” said Tien Tzuo, founder and CEO of Zuora.

Zuora Total Revenue

The stock is up 0.73% since the results and currently trades at $9.60.

Read our full report on Zuora here, it's free.

Best Q1: Flywire (NASDAQ:FLYW)

Originally created to process international tuition payments for universities, Flywire (NASDAQ:FLYW) is a cross border payments processor and software platform focusing on complex, high-value transactions like education, healthcare and B2B payments.

Flywire reported revenues of $64.5 million, up 43.4% year on year, beating analyst expectations by 13.5%. It was an exceptional quarter for the company, with an impressive beat of analyst estimates and a very optimistic guidance for the next quarter.

Flywire Total Revenue

Flywire achieved the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is down 5.25% since the results and currently trades at $20.01.

Is now the time to buy Flywire? Access our full analysis of the earnings results here, it's free.

Coupa (NASDAQ:COUP)

Founded in 2006 by former Oracle executives, Coupa Software (COUP) is a software as a service platform that helps enterprises manage their spending across procurement, billing and business expenses and get a better visibility into how the money is spent.

Coupa reported revenues of $196.3 million, up 17.6% year on year, beating analyst expectations by 2.98%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a decline in gross margin.

Coupa had the weakest full year guidance update in the group. The stock is down 12% since the results and currently trades at $63.44.

Read our full analysis of Coupa's results here.

Workiva (NYSE:WK)

Founded in 2010, Workiva (NYSE:WK) offers software as a service product that makes financial and compliance reporting easier, especially for publicly traded corporations.

Workiva reported revenues of $129.6 million, up 24.4% year on year, beating analyst expectations by 1.76%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and decelerating customer growth.

The company added 3 enterprise customers paying more than $100,000 annually to a total of 1,124. The stock is down 28.1% since the results and currently trades at $67.74.

Read our full, actionable report on Workiva here, it's free.

The author has no position in any of the stocks mentioned