Coupa Software shares slumped as much as 9% on Tuesday after the San Mateo, California-based company’s first-quarter earnings declined from a year ago, prompting several analysts to lower their one-year price targets.
The company, which provides a cloud-based expense management platform, said its total revenues were $166.9 million in the first fiscal quarter ended April 30, 2021, an increase of 40% compared to the same period last year. Subscription revenues were $140.1 million, an increase of 33% compared to the same period last year.
The software maker said its GAAP operating loss was $73.9 million, compared to a GAAP operating loss of $5.6 million for the same period last year. Second-quarter of fiscal 2022, total revenues are expected to be $162.0 to $163.0 million and between $681.0 to $684.0 million for full-year fiscal 2022.
Coupa Software shares slumped as much as 9% to $215.31 on Tuesday. The stock plunged about 34% so far this year.
“Coupa’s Q1 billings came in well ahead of guidance. However, organic growth disappointed due to the weaker base of renewal billings from pandemic-impacted 1Q21. We are highly encouraged by the pace of total bookings and Coupa Pay traction, keeping OW. But as we trim gross margins we take price target to $381,” noted Stan Zlotsky, equity analyst at Morgan Stanley.
“In an uncertain macro environment, we expect relative outperformance in COUP due to 1) defensive nature of Coupa’s core business spend management (BSM) offering, 2) expanding TAM from entry into B2B payments (Coupa Pay) and 3) rapidly improving profitability – all of which drive durable LT growth, in our view. Our $381 price target is based on combining our $226 base case value for the core BSM business and our conservative Coupa Pay estimates, which imply $155 of incremental value. Our PT implies 30X CY22 EV/Sales and 0.79x growth adjusted vs. SaaS peers at 0.57x, a premium we think is appropriate given model conservatism, higher contribution margins from Coupa Pay and sustainability of LT growth.”
Coupa Software Stock Price Forecast
Eighteen analysts who offered stock ratings for Coupa Software in the last three months forecast the average price in 12 months of $301.50 with a high forecast of $413.00 and a low forecast of $250.00.
The average price target represents a 34.57% increase from the last price of $224.04. Of those 18 analysts, 13 rated “Buy”, five rated “Hold” while none rated “Sell”, according to Tipranks.
Morgan Stanley slashed the stock price forecast to $381 from $395 with a high of $521 under a bull scenario and $162 under the worst-case scenario. The firm gave an “Overweight” rating on the software company’s stock.
Several other analysts have also updated their stock outlook. Wells Fargo lowered the price target to $255 from $305. Canaccord Genuity cut the target price to $325 from $375. Truist Securities slashed the target price to $326 from $386. Raymond James lowered the price target to $300 from $365. Mizuho cut the target price to $250 from $320.
Citigroup cut the price target to $254 from $272. Needham lowered the target price to $280 from $385. Oppenheimer slashed the target price to $260 from $320. Barclays cut the target price to $250 from $292. Piper Sandler lowered the target price to $300 from $315. Raymond James cut the target price to $300 from $365.
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