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A Bull Case for Zuora (ZUO)

We recently came across a bullish thesis on Zuora (ZUO) on ValueInvestorsClub. In this article we will summarize the bulls’ thesis on ZUO. ZUO shares were trading at closing price of $9.27 on Apr 18 when this thesis was published. ZUO shares currently trade at a slight discount to that price.

ZUO provides leading software solutions for billing, collections, and revenue recognition. Its founder/CEO Tien Tzuo is best known for building Salesforce’s internal subscription billings platform during his time there and later for writing the business book “Subscribed” in 2018. The company primarily targets large enterprises that sell subscription services across multiple industries, with customers including Zoom, ABB, New York Times, and Cisco.

A software engineer in a coding session, demonstrating the company’s commitment to software excellence.

Zuora report results topping analysts’ expectations

Zuora reported Q1 CY2024 results topping analysts’ expectations, with revenue up 6.5% year on year to $109.8 million. The company expects next quarter’s revenue to be around $112.5 million, in line with analysts’ estimates. It made a non-GAAP profit of $0.11 per share, improving from its profit of $0.05 per share in the same quarter last year.

Zuora’s revenue growth has been unremarkable over the last three years, growing from $80.33 million in Q1 2022 to $109.8 million this quarter.

Named leader by ISG Software Research

Zuora, Inc. announced that it has been named a leader with the strongest performance by ISG Software Research (formerly Ventana Research), part of leading global technology research and advisory firm Information Services Group (ISG), in its Subscription Management Buyers Guides.

“We’ve projected that by 2027, over one-half of all enterprises will deploy a mixed revenue model that includes subscriptions and usage pricing in addition to one-time sales as enterprises make adjustments to remain competitive,” said Stephen Hurrell, Director of Research, Office of Revenue at ISG. “Zuora provides comprehensive support for numerous pricing models with flexibility and scalability to help both B2B and B2C enterprises evolve with customer demand.”

EBANX announce a partnership with Zuora

Another plus for ZUO, EBANX has announced a partnership with Zuora helping to enable payment processing in some of the fastest-growing digital markets in the world. The collaboration aims to support the global expansion of Zuora’s customers by enhancing local payment methods acceptance in 13 markets across Latin America and two markets in Africa, supporting global subscription-based and recurring revenue businesses in these regions. LatAm’s digital services market is set to grow 30% year over year by 2026, when it is expected to reach $271bn, according to Payments and Commerce Market Intelligence, (PCMI) data. In Africa, SaaS will be one of the fastest-growing verticals within the digital commerce market, accelerating at a 25% CAGR by 2026, per the Beyond Borders study, faster than the global average.

ZUO shares are currently trading at significantly discounted valuations, with a price-to-annual recurring revenue (ARR) ratio of approximately 3x and a price-to-next-twelve-months free cash flow ratio of 17x. This undervaluation can be attributed to inconsistent performance and several quarters of disappointing results. However, we believe that this time may be different, and that CEO Tony Tzuo is considering selling ZUO or taking it private.

Several factors may be driving Tzuo’s decision. ZUO’s share price has declined by over 30% since its 2018 IPO price of $14 per share. We estimate that a potential sale of ZUO could be valued at $13-15 per share, representing a 40-60% upside based on a 4.5-5.5x ARR multiple.

ZUO is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held ZUO at the end of the first quarter which was 22 in the previous quarter. While we acknowledge the potential of ZUO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as ZUO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.

Disclosure: None. This article was originally published at Insider Monkey.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
  • It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
  • It plays a pivotal role in U.S. LNG exportation—a sector about to explode under President Trump’s renewed “America First” energy doctrine.

Trump has made it clear: Europe and U.S. allies must buy American LNG.

And our company sits in the toll booth—collecting fees on every drop exported.

But that’s not all…

As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

And infrastructure needs a builder with experience, scale, and execution.

This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

They’re sharing it quietly, away from the cameras, to rooms full of ultra-wealthy clients.

Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
  • The onshoring boom driven by Trump-era tariffs
  • A surge in U.S. LNG exports
  • And a unique footprint in nuclear energy—the future of clean, reliable power

You simply won’t find another AI and energy stock this cheap… with this much upside.

This isn’t a hype stock. It’s not riding on hope.

It’s delivering real cash flows, owns critical infrastructure, and holds stakes in other major growth stories.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

This isn’t just about making money – it’s about being part of the future.

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…