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Zuora (ZUO) to Report Q4 Earnings: What's in the Cards?

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Zuora (ZUO - Free Report) is set to release fourth-quarter fiscal 2021 results on Mar 11.

For the quarter, the company expects total revenues between $75 million and $77 million. On a non-GAAP basis, loss is expected in the 5-6 cents-per-share range.

The Zacks Consensus Estimate for revenues is pegged at $76 million, suggesting growth of 8% from the figure reported in the year-ago quarter.

The consensus mark for loss stayed at 5 cents per share over the past 30 days. Zuora had reported a loss of 9 cents in the year-ago quarter.

Notably, the company beat the Zacks Consensus Estimate in the past four quarters, delivering an earnings surprise of 57.5%, on average.
 

Zuora, Inc. Price and EPS Surprise

Zuora, Inc. Price and EPS Surprise

Zuora, Inc. price-eps-surprise | Zuora, Inc. Quote

 

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

Factors to Watch

Zuora’s fourth-quarter results are expected to have benefited from a resilient subscription-based business model.

The company’s portfolio strength is expected to have helped it win new customers in the to-be-reported quarter. Notably, Zuora helped 41 customers, including Bosch, Media24, Panasonic, Siemens Smart Infrastructure, Sonos and Thomson Reuters, to go live in the previous quarter.

Markedly, in the fiscal third quarter, the number of customers with annual contract value — equal to or greater than $100K — was 653, increasing 11% year over year and forming 90% of Zuora’s business.

Additionally, a robust partner base that includes Accenture (ACN - Free Report) , Capgemini, Deloitte, EY and PwC, is likely to have helped Zuora win enterprise customers. Also, the strong momentum of Zuora Analytics and rising customer acceptance of the company’s new capabilities are expected to have been major growth drivers.

Further, the shift of revenue mix to high-margin subscription revenues is expected to have driven margin expansion. Subscription revenues accounted for 80.3% of total revenues in the third quarter.

Additionally, the dollar-based retention rate, which declined to 99% due to increased customer churn rate, is expected to have remained steady in fourth-quarter fiscal 2021.

What Our Model Indicates

Per the Zacks model, 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.

Zuora has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are couple of companies worth considering as our model shows that these have the right combination of elements to beat on earnings this reporting cycle:

Micron (MU - Free Report) has an Earnings ESP of +5.16% and currently flaunts a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

FedEx (FDX - Free Report) has an Earnings ESP of +2.72% and carries a Zacks Rank of 2, at present.

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