Fact based stock research
Zuora (NYSE:ZUO)

US98983V1061

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Zuora stock research in summary

zuora.com

ANALYSIS: With an Obermatt Combined Rank of 74 (better than 74% compared with investment alternatives), Zuora (Systems Software, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Zuora are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives). But they show above-average growth (Growth Rank of 57) and are safely financed (Safety Rank of 67, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 74, is a buy recommendation based on Zuora's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Zuora exhibits low value (Obermatt Value Rank of 49), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 57). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 67) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	49
Growth Rank	57
Safety Rank	67
Combined Rank	74

Country	USA
Industry	Systems Software
Index
Size class	Medium

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Zuora

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	7	53	49	49
GROWTH
GROWTH	66	11	65	57
SAFETY
SAFETY	5	65	65	67
SENTIMENT
SENTIMENT	n/a	35	64	^new
360° VIEW
360° VIEW	n/a	15	82	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 31-Jul-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Zuora is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	7	53	49	49
GROWTH
GROWTH	66	11	65	57
SAFETY
SAFETY	5	65	65	67
COMBINED
COMBINED	9	24	74	74

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Zuora the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Zuora shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half are above average for Zuora. Price-to-Sales (P/S) is 54, which means that the stock price compared with what market professionals expect for future sales is lower than for 54% of comparable companies, indicating a good value concerning Zuora's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 81% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 1 (dividends are expected to be higher than for 1% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 65% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Zuora to 35. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on Zuora's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner on assets than its competitors. For instance, the company could be leasing its production facilities, or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the low Dividend Yield is also explained as such companies tend to invest their income into market development. The other good value ranks for Sales and Profits are encouraging indicators for the stock price value. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	36	70	63	54
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	11	22	65	81
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	8	32	24	35
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	7	53	49	49

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Zuora; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 57 (better than 57% compared with alternatives), Zuora shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Zuora. Profit Growth has a rank of 80, which means that currently professionals expect the company to grow its profits more than 80% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 59 (above 59% of alternative investments). But Sales Growth has a below the median rank of 34, which means that, currently, professionals expect the company to grow less than 66% of its competitors, and Capital Growth also has a lower rank of 45. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 57, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Zuora. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	48	26	41	34
PROFIT GROWTH
PROFIT GROWTH	n/a	25	88	80
CAPITAL GROWTH
CAPITAL GROWTH	n/a	13	39	45
STOCK RETURNS
STOCK RETURNS	92	71	75	59
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	66	11	65	57

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Zuora.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 67 (better than 67% compared with alternatives), the company Zuora has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Zuora is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Zuora. Refinancing is at 95, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 95% of its competitors. Liquidity is also good at 55, meaning the company generates more profit to service its debt than 55% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 11, which means the company has an above-average debt-to-equity ratio. It has more debt than 89% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 67 (better than 67% compared with alternatives), Zuora has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Zuora could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Zuora and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	51	69	14	11
REFINANCING
REFINANCING	20	55	91	95
LIQUIDITY
LIQUIDITY	9	28	48	55
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	5	65	65	67

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Zuora and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	33	26	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	100	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	51	23	^new
MARKET PULSE
MARKET PULSE	n/a	46	87	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	35	64	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Zuora.
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