ZUO Forecast


Bullish Case: ZUO's adoption of subscription models, evidenced by sustained net revenue retention rates above 100% and strategic acquisitions like Togai, positions it well for growth. Upcoming economic recovery and higher volume of calls traded support upward momentum.


Bearish Case: Execution issues, high implied volatilities, and declining margins highlight potential risks. Continued negative cash flow and recent internal challenges contribute to the bearish outlook.


Potential Outcomes: Probabilistic outcomes:

1) Successful sale/acquisition drives stock rally (~25%),

2) Continued execution challenges depress stock (~55%),

3) Turnaround efforts stabilize price (~20%).


Trading Oracle: Implement a bullish credit spread by selling the 11C and buying the 12C expiring in December 2024. The mean-reverting tendencies and high call traded volume suggest favorable outcomes. This position leverages current low market volatilities and historical price action.


June 30, 2024


Zuora Forecast

ZUO      Zuora











Correlated Assets

Assets that tend to move strongly with ZUO



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.58)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.37)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.12)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.29)



Uncorrelated Assets

Assets with little price relationship to ZUO



VFC Forecast + Options Trading Strategies   VFC  VF (-0.12)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.29)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.37)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.58)



Anticorrelated Assets

Assets that tend to move strongly against ZUO



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.58)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.37)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.12)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.29)





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