Coupa Lifts FY21 Outlook After 3Q Beat; Analyst Raises PT

Shares of Coupa Software rose 3.5% in Tuesday’s pre-market trading after the company raised its fiscal 2021 outlook. The guidance update comes after the cloud-based spending-management software provider reported better-than-expected 3Q results.

Coupa’s (COUP) third-quarter earnings of $0.18 per share declined 10% year-over-year but surpassed analysts’ estimates of $0.03 per share. Its 3Q revenues of $133 million jumped 31% and beat the Street’s estimates of $123.8 million. Its subscription revenues grew 31% year-over-year in 3Q to $118.1 million, while its calculated billings jumped 33%.

Coupa’s CEO Rob Bernshteyn said, “As we approach the end of the year with a focus on resilience and long-term market dominance, we continue to be assertive in expanding our comprehensive Business Spend Management platform to address all spend, unlocking value and profitability for the ever-growing set of customers in our community.” (See COUP stock analysis on TipRanks)

As for fiscal 2021, Coupa foresees revenues in the range of $523 million to $524 million, up from the earlier forecast of between $496.5 million to $498.5 million. The company projects FY21 earnings in the range of $0.47 to $0.49 per share, compared to the previous guidance range of $0.43 to $0.45 per share.

Following the financial results, Oppenheimer analyst Koji Ikeda raised the stock’s price target to $375 (15.8% upside potential) from $285 and maintained a Buy rating. The analyst said, “We believe Coupa continues to disrupt a large and underpenetrated spend management opportunity. Llamasoft gives Coupa another monetization lever and should further widen the differentiation gap between Coupa and its competition.”

Meanwhile, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 9 Buys and 6 Holds. As shares rallied 121.5% year-to-date, the average price target now stands at $308.62 and implies downside potential of about 4.7% to current levels.