Zuora Inc (NYSE:ZUO) is a central cloud growth play during a time when such plays have been in and back out of vogue, and analysts have complained of sky-high valuations in the space on a daily basis. But this stock has seemingly morphed into a value play in the midst of all that action, and now appears to be pivoting back higher. We like the stock. In addition, the company recently announced at its Subscribed New York conference, that the company has been named a Premier Partner in the Amazon Pay Global Partner Program. According to the release, “Merchants can now easily integrate Amazon Pay into their subscription checkout experience. Publishers including The Seattle Times and The Telegraph are now using the powerful combination of Zuora and Amazon Pay to accelerate the shift to the subscription model and help increase their digital readership.”
“Subscriptions are The Telegraph’s top strategic priority,” said Chris Taylor, Chief Information Officer, The Telegraph. “The convenience and reach of Amazon Pay has significantly reduced friction and increased speed of sign up for our subscribers. In combination with Zuora, the benchmark for subscription management, this is incredibly powerful.”
Zuora Inc (NYSE:ZUO) trumpets itself as a company that provides cloud-based software on a subscription basis that enables companies in various industries to launch, manage, and transform into a subscription business.
The company offers Zuora Central platform that acts as an intelligent subscription management hub that automates the subscription order-to-cash process, including quoting, billing, collections, analytics, and revenue recognition.
Its products include Zuora Billing, Zuora RevPro, Zuora CPQ, Zuora Insights, and Zuora Collect. Zuora, Inc. sells its products through its direct sales force and with GSI partners to various industries comprising software, hardware, media, transportation, construction, healthcare, education, retail, Internet of Things, and others worldwide.
The company was incorporated in 2006 and is headquartered in San Mateo, California.
According to company materials, “Zuora provides the leading cloud-based subscription management platform that functions as a system of record for subscription businesses across all industries. Powering the Subscription Economy™, the Zuora® platform was architected specifically for dynamic, recurring subscription business models and acts as an intelligent subscription management hub that automates and orchestrates the entire subscription order-to-cash process, including billing and revenue recognition. Zuora serves more than 1,000 companies around the world, including Box, Komatsu, Rogers, Schneider Electric, Xplornet and Zendesk. Headquartered in Silicon Valley, Zuora also operates offices in Atlanta, Boston, Denver, San Francisco, London, Paris, Beijing, Sydney, Chennai, and Tokyo.”
That Sinking Feeling
As noted above, ZUO recently announced at its Subscribed New York conference, that the company has been named a Premier Partner in the Amazon Pay Global Partner Program. Even in light of this news, and despite a sense of volatile action, ZUO hasn’t really done much of anything over the past week, with shares logging no net movement over that period.
Nonetheless, this has been a chronic value-trap feeling stock. We have seen persistent declines in shares right through the lock-up date. It will be interesting to see if this news can help to shrug off that feel.
“We’re thrilled to be launching with Amazon Pay as a payment method while running our subscription business on Zuora,” said Curtis Huber, Senior Director, Circulation and Audience Revenue, The Seattle Times. “To us, a subscriber-centric business model means building a technology stack that supports our customers with a seamless experience to consume our content on any device. We believe Amazon Pay and Zuora are essential to our subscription business growth. In fact, since adopting Zuora, we’ve already improved retention rate by 30 percent. With the ease of use of Amazon Pay, we expect to see retention rate increase even more.”
Zuora Inc (NYSE:ZUO) pulled in sales of $57.8M in its last reported quarterly financials, representing top line growth of 46.5%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($181M against $114.2M).