Zuora (ZUO) Reports Earnings Tomorrow. What To Expect

Radek Strnad /
2022/05/24 7:05 am EDT

Subscription management platform Zuora (NYSE:ZUO) will be reporting results tomorrow after the bell. Here's what investors should know.

Last quarter Zuora reported revenues of $90.6 million, up 14.3% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a very strong guidance for the next year but an underwhelming revenue guidance for the next quarter. The company added 27 enterprise customers paying more than $100,000 annually to a total of 747.

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 14.8% year on year to $92.2 million, improving on the 8.7% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.01 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 has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 3.04%.

Looking at Zuora's peers in the finance and HR software segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. Flywire delivered top-line growth of 43.4% year on year, beating analyst estimates by 13.5%, and Marqeta reported revenues up 53.8% year on year, exceeding estimates by 3%. Flywire traded down 2.93% on the results, and Marqeta was up 5.42%. Read our full analysis of Flywire's results here and Marqeta's results here.

Technology stocks have been hit hard on fears of higher interest rates and software stocks have not been spared, with share price down on average 19% over the last month. Zuora is down 20.7% during the same time, and is heading into the earnings with analyst price target of $22.2, compared to share price of $10.13.

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.