Coupa Slips 5% In After-Hours On Lower Profit Outlook

Shares of Coupa Software fell 4.8% in Tuesday’s extended trading session after the company’s 3Q earnings guidance fell short of expectations. The cloud-based business software provider projects adjusted EPS between $0.02 and $0.03, while the Street consensus is pegged at $0.05. Meanwhile, the 3Q sales guidance range of $123-$124 million compares with analysts’ estimates of $122.3 million.

On Sep. 8, Coupa (COUP) reported that 2Q revenues jumped 32% to $125.9 million year-over-year ahead of analysts’ expectations of $118.8 million. Adjusted EPS of soared 200% to $0.21 year-on-year, beating Street estimates of $0.08.

Moreover, Coupa raised its fiscal 2021 outlook. The company now projects revenues between $496.5 million and $498.5 million, up from the previous guidance range of $489-$491 million. The adjusted EPS guidance range was also revised upward to $0.43-$0.45 from $0.36-$0.38 earlier. (See COUP stock analysis on TipRanks).

Ahead of earnings, Needham analyst Ryan MacDonald reiterated his Buy rating on the stock and said the company is likely to surpass his 2Q estimates. In a note to investors, MacDonald wrote on Sept. 8 that “Our checks indicate healthy end market trends for procurement software across the majority of customer segments and geographies. We are also confident in Coupa’s 2Q beat due to their strong visibility into current estimates given the limited sequential growth, low churn and conservative guidance philosophy.”

Currently, the Street has a cautiously optimistic outlook on the stock, with a Moderate Buy analyst consensus. With shares up over 89% year-to-date, the average analyst price target of $263.81 now implies downside potential of 4.7% from current levels.

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