Zuora: Slowing Growth Hints At Weaknesses In Business Model (NYSE:ZUO)

I’ve written about software stocks with negative earnings before, and the lack of growth is usually a bad sign. Zuora (ZUO) is one stock that came to my attention as it is “cheap”; however, the slowing growth is a concern. I wanted to do some due diligence to see whether or not this was temporary or symptomatic of larger issues.

Just a brief background on the company, Zuora is a cloud-based software-as-a-service company focused on an internet-based subscription business model. Specifically, the company’s solution combines elements of customer management integrated with billing, payment, and revenue recognition all tailored for the subscription business model. Think of it as a light version of Salesforce (CRM) that does subscription business accounting really well as the company’s bread and butter is their Zuora Billing and Zuora RevPro.

Unlike most traditional enterprise reporting software, Zuora is built from the ground up to handle the ordering,

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