Zuora Earns ‘Buy’ Rating Amidst Steady Growth and Strategic Financial Focus
Zuora (ZUO – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Joshua Reilly from Needham maintained a Buy rating on the stock and has a $15.00 price target.
Joshua Reilly has given his Buy rating due to a combination of factors relating to Zuora’s financial outlook and strategic focus. Despite macroeconomic headwinds expected to persist into FY25, Zuora’s Q4F24 earnings align with the projections made earlier in January. The company’s anticipated annual recurring revenue (ARR) growth of 8-10% for FY25 also meets expectations, which suggests a stable financial trajectory. Moreover, management’s commitment to improving margins and achieving the “Rule of 30” by the end of FY25 indicates a strong focus on financial health and efficiency.
Furthermore, the churn of two large customers, which was not in Zuora’s core markets, does not reflect a broader trend and might be subject to reversal in a more favorable economic environment. The conservative stance on initial FY25 estimates, potentially lower than what might have been traditionally guided, reflects a cautious but realistic approach given current uncertainties. This prudence, along with the expected recovery in growth by FY26, provides a solid foundation for Reilly’s optimistic outlook on the company’s stock.
According to TipRanks, Reilly is a 3-star analyst with an average return of 2.0% and a 44.68% success rate. Reilly covers the Technology sector, focusing on stocks such as Zuora, Clear Secure, and Jamf Holding.
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Zuora (ZUO) Company Description:
Zuora, Inc. operates as an online subscription billing and management platform. The firm’s products include Zuora Billing, Zuora RevPro, Zuora CPQ and Zuora Collect. Its Central Platform is composed of six core engines: Pricing Engine, Subscription Orders Engine, Rating Engine, Global Payments Engine, Subscription Metrics and Subscription Accounting Engine. It also offers traditional ERP software, such as Oracle Corporation and SAP AG. The company was founded in 2007 by K.V. Rao, Cheng Zou and Tien Tzuo and is headquartered in San Mateo, CA.
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