What Happened:
Shares of subscription management platform Zuora (NYSE:ZUO) jumped 7.64% in the after-market session after the company reported first-quarter revenue and earnings per share that surpassed analysts' expectations. There was a significant turnaround in free cash flow, with the company achieving positive results, which is a notable improvement compared to the increasing cash burn experienced in the previous three quarters. The company provided favorable guidance for the next quarter, surpassing Consensus estimates for revenue. Additionally, the full-year revenue guidance was in line with expectations. The profitability guidance was also encouraging, as the projected earnings per share for both the next quarter and the full year were roughly in line with market expectations.
What is the market telling us:
Zuora's shares are very volatile and over the last year have had 34 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
Zuora is up 51.5% since the beginning of the year, and at $9.88 per share it is trading close to its 52-week high of $10.46 from May 2022. Investors who bought $1,000 worth of Zuora's shares 5 years ago would now be looking at an investment worth $460.28.
Is now the time to buy Zuora? Access our full analysis of the earnings results here, it's free.