Zuora, Inc. (NYSE:ZUO) shareholders should be happy to see the share price up 23% in the last month. But that doesn't change the fact that the returns over the last half decade have been disappointing. Indeed, the share price is down 51% in the period. So we're not so sure if the recent bounce should be celebrated. We'd err towards caution given the long term under-performance.

On a more encouraging note the company has added US$54m to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.

Zuora isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last half decade, Zuora saw its revenue increase by 12% per year. That's a pretty good rate for a long time period. The share price return isn't so respectable with an annual loss of 9% over the period. It seems probably that the business has failed to live up to initial expectations. A pessimistic market can create opportunities.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

If you are thinking of buying or selling Zuora stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We're pleased to report that Zuora shareholders have received a total shareholder return of 34% over one year. There's no doubt those recent returns are much better than the TSR loss of 9% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Zuora better, we need to consider many other factors. Take risks, for example - Zuora has 3 warning signs we think you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.