Why Is This Analyst Optimist Over Absolute Software, Paycor, Zuora Results This Week?

Needham analyst Scott Berg acknowledged that June-quarter earnings would conclude this week while July-quarter earnings fire up with five companies reporting, namely, Absolute Software Corp ABST, Paycor HCM, Inc PYCR, Salesforce, Inc CRM, Workday, Inc WDAY, and Zuora, Inc ZUO.
He saw that 2QF22 earnings had a robust positive bend to them; however, last week's IGV (-3.9%) underperformed both the NASDAQ (-2,6%) and the S&P 500 (-1.2%) as new interest rates drove investors away from his growth-orientated space.
This week, he was most positive on ABST (reiterated Buy; Price Target $14), PYCR (maintained Buy; Price Target $42), and ZUO (reaffirmed Buy; Price Target $24).
For ABST, he believes educational sales had a solid seasonal rebound, while his industry checks suggest the company's Enterprise and Government segment continues to execute well.
For PYCR, SaaS payroll companies have reported strong CY2Q 2022 results so far, and his industry work suggests PYCR had a similar demand benefit.
For ZUO, he believes the current valuation of 3x ARR is too low given the 20%+ ARR growth opportunity he foresees for the next few years, driven by improving sales productivity.
While the company has not made any acquisitions with the capital from Silver Lake, he does not expect any transformative deals but rather technology-focused tuck-in deals that are incremental to the product portfolio.
Price Action: ABST shares traded lower by 0.88% at $10.15 on the last check Monday.

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