Three Cheap Stocks for Investment: Zuora
Zuora is a leader in the subscription management segment. It allows users to control their subscription spending. The user may subscribe to various apps and services via Zuora and have control over every penny spent.
ZUO stocks are trading 605 off their peaks of 2021 despite a strong earnings report for Q1 2022. The company’s revenue rose 16% year-on-year to $93.2 million and is 14% above Q4 2021. The annual recurring revenue, a key metric for a software company, is up by 20% year-on-year to $326.3 million, which is flagging a possible revenue increase over the coming months. The Net Revenue Retention Rate is at 110% meaning clients are paying 10% above last year’s level. The EBITDA margin grew to -3%, moving the company close to becoming profitable.
Growth drivers for the company are the increasing number of subscription services, and the enhancement and expansion of existing services for revenue management to billing systems.
The target price for ZUO stocks in the mid-term is at $15.50.