Coupa Software Analysts Bullish After Q4 Print; Raymond James Sees Large-Cap Potential

Coupa Software Inc COUP reported forecast-beating fourth-quarter results Monday but issued disappointing guidance, dragging its shares lower.

The Analyst

Oppenheimer analyst Koji Ikeda reiterated an Outperform rating and hiked the price target from $85 to $100.

Raymond James analyst Brian Peterson reiterated an Outperform rating and increased the price target from $86 to $107.

Oppenheimer Sees Business Momentum Into 2020

Coupa's quarterly results were marked by strong sales performance, with 40-percent-plus growth trends across key metrics such as billings, subscription billings, deferred revenue and subscription revenue, Ikeda said in a Tuesday note.

The results also revealed $1 trillion in spend under management and an expanding partner network, the analyst said. 

The initial 2020 growth guidance, though above consensus, suggests a slowing growth trend, Ikeda said. Yet the analyst said the guidance could prove conservative in light of strong fourth-quarter sales performance.

"We believe the strong business momentum Coupa is currently experiencing will likely continue in FY2020," the analyst said. 

Oppenheimer expects Coupa to provide further visibility into the model, potential catalysts and the payments opportunity at its investor day Wednesday.

Raymond James: Coupa Could Become Large-Cap Story

Following another quarter of broad-based upside, Raymond James' forward projections are moving notably higher, Peterson said in a Monday note. 

The analyst said he continues to believe in the combination of Coupa's compelling return on investment proposition, expanding product offering and strategic partner ecosystem.

These factors suggest revenue per customer levels should be materially higher than the current low six-figure range, Peterson said. 

Raymond James said this figure could be materially higher if the company can monetize the incremental payments functionality associated with the $1 trillion-plus in cumulative spend on the platform.

This could ultimately make Coupa a large-cap company, the analyst said. 

The Price Action

Coupa shares were down 2.17 percent at $91.54 at the time of publication Tuesday. 

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