Coupa Software Inc. (NASDAQ: COUP) has confirmed the release date for its quarterly earnings report, which will be on Monday, March 14, 2022, after the closing bell.
What to look for: in the third quarter, the company reported solid results thanks to robust adoption of the company’s Coupa platform as customers continue prioritizing Business Spend Management as a basic tenet of their growth strategy. In addition, the company has been leveraging the Value-as-a-Service strategy to add more customers across various industries, and when the Q4 2022 results are out, investors will be keen to see how the Coupa has managed.
Earnings: Stockearning’s Estimated EPS for fiscal Q4 2022 is expected to be $0.67 per share. When the company announced its Q3 2022 earnings, it produced an earnings surprise of 47.83%, with an EPS loss of $0.36 per share versus an estimated EPS loss of $0.69. Historical EPS performance shows that the company has, in the past 12 quarters, topped estimates 19 times (90%) and missed twice (2%).
Revenue: During the third quarter, the company offered guidance indicating that it expected total revenues of $185 million to $186 million in the fourth quarter of 2022. The company predicted that subscription revenue will be between $166 million and $167 million, with professional services revenue being around $19 million. Total revenue in the third quarter was $185.8 million representing a YoY increase of 40%, with subscription revenue increasing 40% to 164.7 million.
Stock movement: COUP shares have lost 33% since the company released its last earnings release. Interestingly, following the earnings release, the company's shares have been UP 14 times in the past 27 quarters. So, the historical price reaction suggests a 51% probability of the share price going UP following the earnings release. According to the Stockearning algorithm, the predicted volatility on the first day is +/-8%, while the predicted volatility on the seventh day is +/-10%.
What analysts are saying: UBS analyst Taylor McGinnis slashed his price target on the stock from $208 to $130 to reflect the software sector re-rating and kept a Hold rating on the shares. In a research note, the analyst told investors that most checks indicated a consecutive increase in pipeline and desire for Coupa's programs as the company approaches its Q4 earnings next week. But, on the other hand, McGinnis is "hesitant" to endorse shares because of a lack of clarity on the potential headwinds from weaker LLamasoft and BELLIN performance in FY23's first half.
KeyBanc analyst Josh Beck slashed the firm's price target in the stock from $200 to $175 and maintained a Buy rating on the stock. In a research note, the analyst told investors that Coupa's March 14 Q4 results might be considered as basically in line, as Beck sees space for a big beat vs. Street forecasts. In addition, based on a series of latest VAR/SI channel inspections that indicated increased RFP activity, Beck believes demand is returning to pre-Covid levels.
Mizuho analyst Siti Pannigrahi slashed his price target in the stock from $180 to $130 and maintained a Hold rating on the shares. Panigrahi told investors in a research report that software as service valuations had begun to normalize over the last two weeks after plummeting to start 2022. As a result, price targets were lowered due to lower peer multiples, according to the analyst.
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