Barclays Expecting A Q3 Beat From Coupa Software

Coupa Software Inc COUP is scheduled to report earnings December 4 and the Wall Street analysts expect revenue of $43 million.

The Analyst

Barclays' Raimo Lenschow reiterated an Equal Weight rating and increased the price target from $34 to $38.

The Thesis

Coupa Software continues to fire on all cylinders and Q3 should add on momentum with growth in spend under management, notable new logo wins and strategic acquisitions, said Lenschow. He expects these tailwinds to continue to be visible in Q3, but he wants to stay on sidelines because the stock is currently trading in line with more established peers, like Workday Inc WDAY and ServiceNow Inc NOW.

Lenschow expects the company to report better than expected revenue as the current estimates are below the historical average. Coupa Software should also benefit from the revenue recognition change to professional services and the analyst questions whether this is reflected in the analyst consensus. Lenschow sees spend under management as a key metric to follow as it ultimately benefits top line growth.

The Price Action

Coupa Software failed to break above its 52-week high in October, forming a double top pattern. It pulled back to $32.69 in November, but it bounced back to its current price of $34.87 and it looks like it's going to test the resistance once again, going into earnings.