ZUO stock is taking a hit on Friday after Zuora Inc (NYSE:ZUO) estimated lower than expected revenue for the year.
California-based enterprise software company Zoura Inc, whose business is primarily based on subscription management software, has found itself in turmoil on Friday. Late Thursday the company cut its forecast for sales for 2019 and went on to add that the President of the company was also being replaced.
In the first quarter this year, the company made a loss of $20.6 million, which amounted to a per-share loss of 19 cents. In the year-ago period, the losses stood at $17.8 million or 40 cents a share. On an adjusted basis, the company lost 11 cents a share, topping analyst projection of 13 cents a share. The revenue in Q1 2019 stood at $54.1 million, which reflects a rise of 22%.
However, for the current quarter, the company projects per share of $0.15 to $0.13 on revenue of $66–68 million. Analysts expect a loss of 11 cents a share on revenue of $71.24. For the FY20, the company lowered its revenue forecast to $268–278 million from $289–293.5 million, well behind the analyst estimates of $291.22 million.
On Friday, ZUO stock went down by as much as 33% as investors started a selloff following those announcements. The stock made an all-time low of $13.35 earlier in the session. In fact, Zuora’s stock is now trading below its IPO price last April of $14.
Tzien Tuzo, who is the founder and current Chief Executive Officer of the company, stated that the company’s sales strategies and execution have not been up to the mark.
In order to improve its sales figures, Zuoro is now looking for a new President who will be able to drive sales growth. The outgoing President, Marc Diouane, who has been in the position since 2015, will continue to remain as an advisor until Zuoro can find a new President.
ZUO stock has tumbled about 45% from its recent peak price of $24.
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