5 Reasons For Piper Sandler's Upgrade Of Coupa Software

Piper Sandler recommends building positions in Coupa Software Inc COUP ahead of its July 2021 analyst day, especially following the recent sell-off.

The Coupa Software Analyst: Brent Bracelin upgraded the rating for Coupa Software from Neutral to Overweight, while raising the price target from $300 to $315.

The Coupa Software Thesis: The stock has shed 22% year to date, versus a 10.8% gain in the S&P 500, Bracelin said in the upgrade note.

The analyst mentioned five reasons for buying the stock ahead of the July analyst day:

• Billings growth could trough this quarter
• Subscription growth may reaccelerate in the second quarter, on easier enterprise comparisons
• “Strong secular tailwinds tied to the largest back-office investment cycle since Y2K”
• Strong enterprise activity in March
• A strong leadership team and a “track record of balancing high-growth and profitability”

“Arguably the biggest upgrade cycle within back-office systems occurred roughly 20+ years ago ahead of Y2K. We see 2021 as the beginning of the next major modernization wave for back-office systems that have been perennial laggards in the shift to cloud,” Bracelin wrote. He named Coupa Software as one of the key beneficiaries of this trend.

COUP Price Action: Shares of Coupa Software had declined by 1.68% to $259.04 at the time of publication Tuesday.

(Photo: Scott Graham via Unsplash)