Analysts Lower Price Target On Coupa Software Following Analyst Meet

Piper Sandler analyst Brent Bracelin lowered the price target on Coupa Software Inc COUP to $295 from $300, implying a 30.48% upside, and maintained an Overweight rating.

Coupa's first analyst day since 2019 may upset the Coupa Pay bulls given the Coupa Pay penetration target of 10% for FY21 versus bullish expectations of 25%, Bracelin states. 

He, however, argues the target as conservative, leaving ample room for the upside. 

Although, he estimates the news to put a lid on further multiple expansion until other growth catalysts materialize.

Morgan Stanley analyst Stan Zlotsky lowered the price target on Coupa to $345 from $381, implying a 52.59% upside, and maintained an Overweight rating following the analyst day. 

Coupa management typically outlined the broad strokes around monetizing its nascent Pay business segment and set very conservative forward targets, Zlotsky stated. 

He is adjusting his Coupa Pay estimates across the board to better align with management's targets, which drives his lower target. 

However, Coupa's core business ex-Pay value at $200 per share implies that at current levels, about 90% of the stock's value is in the core business, leaving Pay as the X-factor.

Mizuho analyst Siti Panigrahi says Coupa's analyst day disclosures on Coupa Pay's total addressable market and the implied ramp of Pay adoption appear lower than investors' expectations and triggered yesterday's selloff in shares. 

Panigrahi affirms a Neutral rating on the stock and prefers to wait for the payback from Coupa Pay before buying. Coupa closed yesterday down 10% to $226.09.

Coupa announced some long-term targets analyst day meet, including a long-term gross margin target of 80%-82% and an operating margin target of 25%-30%.

Price action: COUP shares traded lower by 2.91% at $219.50 in the market session on the last check Friday.