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Zuora (ZUO) To Report Q4 Earnings: What's In The Cards?

By Zacks Investment ResearchStock MarketsMar 09, 2020 09:07PM ET
Zuora (ZUO) To Report Q4 Earnings: What's In The Cards?
By Zacks Investment Research   |  Mar 09, 2020 09:07PM ET
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Zuora, Inc (NYSE:ZUO) is scheduled to report fourth-quarter fiscal 2020 results on Mar 12.

For the quarter under review, the company expects revenues in the range of $71-$72.5 million.

The Zacks Consensus Estimate for revenues is currently pegged at $71.8 million, which suggests growth of 12% from the year-ago quarter’s reported figure.

For the quarter under review, the Zacks Consensus Estimate for a loss has been steady at 10 cents per share in the past 30 days. The company reported a loss of 11 cents in the year-ago quarter.

Notably, the company has trailing four-quarter positive earnings surprise of 24.7%, on average.

Let’s see how things have shaped up for this announcement.

Zuora, Inc. Price and EPS Surprise

Factors to Consider

Zuora’s top line is expected to have benefited from the ongoing shift to a subscription-based business model across several business verticals.

Moreover, the company’s innovative portfolio of solutions has well positioned it to serve the majority of non-technical companies that are going through a transition phase due to digital transformation. This is expected to have contributed to the company’s growth during the quarter.

Notably, major automobile companies like Fiat Chrysler and Harley-Davidson as well as utility companies like Saint Gobain (PA:SGOB) have adopted Zuora’s platform for their digital transformation needs in fiscal third quarter.

Further, clients like Briggs & Stratton, Radiuz and Poly were added in fiscal fourth quarter. The addition of aforementioned new customers is likely to have had generated incremental revenues for the company in the quarter under review.

Additionally, integration of the company’s Billing and RevPro platforms has opened up cross-selling opportunities, which is expected to have had a positive impact on Zuora’s subscription revenues in fiscal fourth quarter.

However, the company expects increased expenses due to higher wages and payroll taxes to keep margins under pressure in the to-be-reported quarter. This also includes $600K of additional rent expenses associated with the shift in Zuora’s headquarters.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Zuora this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zuora has a Zacks Rank #3 and an Earnings ESP of 0.00%.

Stocks to Consider

Here are some companies, which per our model, have the right combination of elements to post an earnings beat this quarter:

Micron Technology, Inc. (NASDAQ:MU) has an Earnings ESP of +5.05% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

lululemon athletica inc. (NASDAQ:LULU) has an Earnings ESP of +0.27% and a Zacks Rank #2.

Darden Restaurants, Inc. (NYSE:DRI) has an Earnings ESP of +1.03% and a Zack Rank #3.

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Zuora, Inc. (ZUO): Free Stock Analysis Report

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Zacks Investment Research
Zuora (ZUO) To Report Q4 Earnings: What's In The Cards?

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Zuora (ZUO) To Report Q4 Earnings: What's In The Cards?

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