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Why Zuora Stock Jumped 31.3% Last Month

By Keith Noonan – Updated May 11, 2020 at 8:22AM

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The subscription-focused fintech stock has climbed in April and May, but its share price is still down roughly 21% year to date.

What happened

Shares of Zuora (ZUO 4.21%) climbed 31.3% in April, according to data from S&P Global Market Intelligence. The subscription management company's share price posted substantial recovery after sinking 39.2% in March's trading.

^SPX Chart

^SPX data by YCharts

Zuora stock rebounded along with the momentum of the broader market in April. The stock also appears to have gotten a boost from details shared by management during an investor conference call that took place in the middle of the month.

A person using a laptop.

Image source: Getty Images.

So what

On an investor conference call hosted by Jeffries on April 15, CEO Tien Tzuo shared some promising details about how businesses using Zuora's subscription-management services were performing amid the novel coronavirus crisis. Tzuo noted that only between 10% and 12% of the company's customer base saw net subscriber counts decrease in March. He also said that 25% of businesses on its platform saw subscriber acquisition accelerate, and 50% of businesses didn't see any meaningful change.

Now what

Zuora's stock has continued to climb in May. The company's shares are up roughly 6.5% in the month so far.

^SPX Chart

^SPX data by YCharts

Zuora is scheduled to report quarterly results after the market closes on June 3. The company reported fourth-quarter earnings in March and laid out a target for first-quarter revenue between $70.5 million and $73 million and a non-GAAP (adjusted) loss per share between $0.10 and $0.11. For the full year, Zuora expects to post an adjusted loss per share between $0.25 and $0.29 on sales between $300 million and $307 million.

Zuora is valued at roughly 4.3 times the average analyst target for this year's sales.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Zuora. The Motley Fool has a disclosure policy.

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