Zuora is the company that helps companies and individuals manage their subscription-based services. Its stocks lost about 60% during the recent correction. Stock prices recovered some losses after a publication of a strong financial report for the Q4 2022, but they have some more room to rise.
The major driver for the company is that more businesses are turning to a subscription-based model, generating more clients for Zuora. Anyone can manage their subscriptions by themselves, but with the growing number of these subscriptions it would be very tricky to manage them all, especially for firms. There is no alternative in the market as Zuora is entirely focused on subscription issues offering its clients tailored services to manage their revenues and billing services.
Zuora has reported revenues up by 14% year-on-year to $103 million in Q4 2022 beating Wall Street expectations of 11% growth. The company posted that its Annual Recurring Revenues (ARR) are up by 16% year-on-year to $365 million, which is 80% of the ARR expected level by the end of 2023. Strong financial results, together with a rather small market capitalisation at $1.2 billion, makes the company attractive for large corporates that are willing to diversify their business. In other words, adding Zuora stocks to your investment portfolio at current prices looks very attractive for long-term investors.