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Coupa Software Stock Fell 4% despite Strong Q1 Results

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On Monday, Coupa Software (NASDAQ:COUP) stock fell 4% in after-hours trading following its results for the first quarter of fiscal 2021. The technology company reported higher-than-expected results in the first quarter despite COVID-19 fears. Coupa Software’s top-line and bottom-line numbers beat Wall Street analysts’ consensus estimates.

Coupa Software’s earnings results for Q1

In the first quarter, Coupa Software reported an adjusted EPS of $0.20 compared to $0.03 in the first quarter of fiscal 2020. The earnings beat analysts’ consensus estimate of $0.07 per share. Meanwhile, the company generated sales of $119.2 million—a growth of 46.6% from the first quarter of fiscal 2020. The company beat analysts’ consensus revenue expectation of $111.5 million. In the first quarter, Coupa Software’s subscription sales rose 44.9% YoY (year-over-year) to $105.7 million.

In the first-quarter earnings release, Coupa Software CEO Rob Bernshteyn said, “Our strong first quarter results are a clear representation of the value Coupa delivers to customers in all economic climates.” Bernshteyn also said, “As we focus on supporting our employees and ensuring all members of the Coupa community emerge from this pandemic stronger, we continue to leverage our thoughtful, disciplined financial approach, the strength of our balance sheet, and a focus on business resilience to foster growth and position ourselves for sustained market leadership well beyond the current crisis.”

Financial outlook

In the second quarter, Coupa Software expects its total revenues to be between $118 million and $119 million. The company expects its subscription revenues to be between $107 million and $108 million. Meanwhile, Coupa Software expects its non-GAAP EPS to be between $0.06 and $0.08 for the second quarter.

For fiscal 2021, Coupa Software expects its total revenues to be between $489 million and $491 million. The company also expects its non-GAAP EPS to be between $0.36 and $0.38 for fiscal 2021.

Wall Street analysts expect Coupa Software to report an adjusted EPS of $0.05 on revenue of $118.2 million in the second quarter. Analysts also expect the company’s revenues to rise by 25.9% YoY in fiscal 2021 to $490.5 million. The sales could rise by 22.8% YoY in fiscal 2022 to $602.4 million. The adjusted earnings will likely fall by 32.7% YoY in fiscal 2021 to $0.35 per share. However, the profits could rise by 71.4% YoY to $0.60 per share in fiscal 2022.

Analysts’ recommendations for Coupa Software

Among the 21 analysts following Coupa Software stock, 13 recommend a “buy,” seven recommend a “hold,” and one recommends a “sell.” Wall Street analysts’ mean target price on the stock is $206.63, which implies a 6.4% loss from the current level of $220.78. The consensus target price for the stock has risen from $143.58 in May—a growth of 43.9%.

Many analysts revised their target price for Coupa Software stock after its first-quarter results.

  • Piper Sandler increased its target price from $130 to $211.
  • Canaccord Genuity increased its target price from $140 to $242.
  • RBC Capital increased its target price from $140 to $245.
  • Oppenheimer increased its target price from $145 to $250.
  • Evercore ISI increased its target price from $170 to $250.
  • Needham increased its target price from $136 to $255.
  • Wedbush decreased its target price from $198 to $188.
  • Mizuho decreased its target price from $200 to $180.
  • Raymond James increased its target price from $135 to $235.
  • Suntrust Robinson increased its target price from $150 to $240.

Stock returns

Coupa Software stock rose 1.8% on Monday and ended the day at $220.78. At this closing price, the company’s market cap is $14.7 billion. Notably, the stock is trading 7.3% below its 52-week high of $238.19 and 123% above its 52-week low of $99.01.

Based on the closing price on Monday, Coupa Software stock was trading 1.7% above its 20-day moving average of $217.04. The stock is also trading 21.4% above its 50-day moving average of $181.89 and 31.8% above its 100-day moving average of $167.53. Coupa Software’s 14-day relative strength index number is 60. The number indicates that the stock isn’t overbought or oversold.

Coupa Software stock has an upper Bollinger Band level of $232.51, while its lower Bollinger Band level is $201.57. On Monday, the stock closed near its middle Bollinger Band level of $217.04, which indicates that it’s neutral.

On Monday, the Dow Jones Industrial Average rose by 461 points or 1.70%. Also, the S&P 500 and the Nasdaq Composite rose by 1.20% and 1.13%, respectively. Read US Stock Markets: Will Nasdaq Hit All-Time Highs in June? to learn more.

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