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Zuora (ZUO) Reports Q1: Everything You Need To Know Ahead Of Earnings

StockStory - Tue May 23, 2023

ZUO Cover Image

subscription management platform Zuora (NYSE:ZUO) will be announcing earnings results tomorrow afternoon. Here's what investors should know.

Last quarter Zuora reported revenues of $103 million, up 13.6% year on year, beating analyst revenue expectations by 2.8%. It was a slower quarter for the company, with decelerating growth in large customers and underwhelming guidance for the next year. The company added 3 enterprise customers paying more than $100,000 annually to a total of 773.

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 9.55% year on year to $102.1 million, slowing down from the 16% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0 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 1.84%.

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. Marqeta delivered top-line growth of 30.8% year on year, beating analyst estimates by 2.58% and Flywire reported revenues up 46.2% year on year, exceeding estimates by 14%. Marqeta traded down 1.81% on the results, Flywire was up 10.2%. Read our full analysis of Marqeta's results here and Flywire's results here.

There has been positive sentiment among investors in the software segment, with the stocks up on average 6.38% over the last month. Zuora is up 2.26% during the same time, and is heading into the earnings with analyst price target of $12.7, compared to share price of $8.59.

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.

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