#7 - Zuora (NYSE:ZUO)
Last, but not least, is Zuora (NYSE:ZUO). This company is not a pure-play on fintech. Rather they provide the tools that companies need to operate in what Zuora brands as the Subscription Economy.
The company recently closed out its fiscal year for 2021. The company posted a year-over-year revenue increase of 6%. However, what should interest investors is the growth in earnings which improved from a negative 52 cents per share to a negative 25 cents per share. While still not profitable, the company is trending in the right direction and investors are taking notice. Institutional buying has outweighed selling in the last four quarters. And in the last quarter, institutions scooped up more of ZUO stock than at any time in nearly two years.
ZUO stock has not been heavily covered by analysts in the last year. However of the three analysts that have provided a rating, the stock is forecast to have a 6% upside. And with a market cap of just over $2 billion, the stock looks attractively priced.
About Zuora
Zuora, Inc provides a monetization suite for modern businesses to help companies launch and scale new services and operate dynamic customer-centric business models. The company offers Zuora Billing that allows customers to deploy various pricing and packaging strategies to monetize their recurring revenue streams, bill customers, calculate prorations when subscriptions change, and automate billing and payment operations; Zuora Revenue, a revenue recognition and automation solution that accounting teams use to manage their complex revenue streams; Zuora Payments to provide payment orchestration services for companies looking to operate globally; and Zephr, a digital subscriber experience platform that helps companies orchestrate dynamic experiences that increase conversion, reduce churn, and nurture ongoing subscriber relationships.
Read More - Current Price
- $10.16
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 3 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $12.00 (18.1% Upside)
For fintech stocks to truly take over the banking world, they will have to be able to do some things that they currently cannot. For example, one limitation to fintech companies is their inability to assist in transactions that require verification of a credit score (i.e. mortgage lending).
This, more than the technology itself, is what steers some older consumers away from fintech. As homeowners and with other commitments, fintech may not speak to their financial needs. Fintech companies targeted millennial and Gen-Z consumers because of the sheer size of the potential market. And before the recent housing boom, this wasn’t much of an issue.
However, an important benefit of fintech companies is that they can more easily integrate with cryptocurrency. In fact, cryptocurrency is one of the main areas that fintech companies are trying to cultivate along with other leading-edge technologies such as blockchain, smart contracts, and open banking.
More Investing Slideshows:
