Zuora Earnings: What To Look For From ZUO

Kayode Omotosho /
2022/03/01 7:24 am EST
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Subscription management platform Zuora (NYSE:ZUO) will be reporting results tomorrow afternoon. Here's what investors should know.

Last quarter Zuora reported revenues of $89.2 million, up 15.5% year on year, beating analyst revenue expectations by 3.1%. It was a strong quarter for the company, with accelerating growth in large customers and a very optimistic guidance for the next quarter. The company added 26 enterprise customers paying more than $100,000 annually to a total of 720.

Is Zuora buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Zuora's revenue to grow 13.9% year on year to $90.3 million, improving on the 12.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.02 per share.

Zuora Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 2.73%.

Looking at Zuora's peers in the finance and HR software segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. Intuit (NASDAQ:INTU) delivered top-line growth of 69.6% year on year, missing analyst estimates by 1.65% and Ceridian (NYSE:CDAY) reported revenues up 26.6% year on year, exceeding estimates by 2.56%. Intuit traded down 7.3% on the results, Ceridian was down 5.13%. Read our full analysis of Intuit's results here and Ceridian's results here.

The technology sell-off has been putting pressure on stocks since November and while some of the software stocks have fared somewhat better, they have not been spared, with average share price declining 4.55% over the last month. Zuora is down 8.71% during the same time, and is heading into the earnings with analyst price target of $21.8, compared to share price of $15.18.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.