New Trade for January 5th, 2021

Concerns about the two Senate runoff elections dampened optimism in yesterday’s session, sending the DJIA into a sharp decline, making yesterday the first negative start to a year since 2016.  Wall Street sentiment appears to reflect a cautious sentiment as stocks try to hold steady. 

Small-caps were not immune to yesterday’s decline, as indicated by the Russell 2000’s 1.5% drop.  Never-the-less 2021 could be a great year for small-caps which tend to grow faster than larger-cap stocks when the economy is expanding because they’re more focused on their niches and it takes less water to raise their boat.  But in the shrinking universe of smaller firms, investors need to be selective.  Today’s trade alert highlights one small-cap firm that should benefit as a recently formed trend takes hold in the world of software services.  



The shift to subscription-based business models has been one of the most influential and profitable trends of the last decades.  Zuora (ZUO) provides software services that allow businesses to easily implement and scale subscription-based businesses.

As influential as the growth of the subscription economy has been, the overall transformative impact of the shift remains at an early stage.  When economic challenges hit and uncertainty is on the horizon, businesses tend to pull back on growth initiatives and become more hesitant — and that includes decisions to implement new software systems or move into new markets.  This has made it more difficult for Zuora to bring on new customers, but momentum should bounce back.  

Furthermore, Zuora Inc. recently announced today that it is helping Siemens Healthineers AG (SHL.DE), a leading medical technology company with over 120 years of experience and 18,500 patents globally, introduce new recurring revenue streams from its Digital Health Solutions Portfolio using Zuora Billing and Zuora Revenue.

The advent of cloud-based data management and artificial intelligence (AI) have enabled advancements in medical technology that are increasing operational efficiency while improving patient outcomes. Siemens Healthineers has been at the forefront of this trend.  With new successful products, challenges for the company’s finance and IT functions arose.  The solution that they found was Zuora’s subscription model which is characterized  by smaller payments, a need for pricing adaptation, varying volumes, frequent changes, and distinctive accounting rules. As a result, the entire order-to-revenue process, with its complementary back-office processes, differs substantially from those for a transactional business model. Siemens Healthineers’ traditional sales approach for hardware and software needed to be tuned for new and dynamic digital offerings; the company needed the ability to support new recurring revenue models across multiple customer touch points for a seamless end-to-end subscription experience.

Automating the order-to-revenue process with Zuora has enabled Siemens Healthineers to reduce the number of manual processes by more than 60% and become more agile by shortening the processing time by about 75% for their subscription management.

Perhaps just as important as pricing flexibility and efficiency gains from automation has been Zuora’s unique expertise on the cultural shift to subscriptions.Zuora has given us both technical and strategic capabilities to achieve our long-term goal of running a successful subscription model in the backend,” said Florian Rachny, Head of Digital Business Processes, Siemens Healthineers.  

If this is any indicator for what the future might hold for ZUO, now may be the opportune time to initiate a position in this up and coming firm.  

Where to invest $1,000 right now...

Before you consider buying Zuora, you'll want to see this.

Investing legend, Keith Kohl just revealed his #1 stock for 2022...

And it's not Zuora.

Jeff Bezos, Peter Thiel, and the Rockefellers are betting a colossal nine figures on this tiny company that trades publicly for $5.

Keith say’s he thinks investors will be able to turn a small $50 stake into $150,000.

Find that to be extraordinary?

Click here to watch his presentation, and decide for yourself...

But you have to act now, because a catalyst coming in a few weeks is set to take this company mainstream... And by then, it could be too late.

Click here to find out the name and ticker of Keith's #1 pick...