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COUPA SOFTWARE (COUP) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

COUPA SOFTWARE (COUP) closed at $133.90 in the latest trading session, marking a +1.72% move from the prior day. This move outpaced the S&P 500's daily gain of 0.41%. At the same time, the Dow added 0.57%, and the tech-heavy Nasdaq gained 0.7%.

Heading into today, shares of the company had lost 2.54% over the past month, lagging the Computer and Technology sector's gain of 2.38% and the S&P 500's gain of 2.04% in that time.

Investors will be hoping for strength from COUP as it approaches its next earnings release. The company is expected to report EPS of $0.07, down 12.5% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $96.52 million, up 43.07% from the year-ago period.

COUP's full-year Zacks Consensus Estimates are calling for earnings of $0.16 per share and revenue of $372.90 million. These results would represent year-over-year changes of -20% and +43.22%, respectively.

Investors should also note any recent changes to analyst estimates for COUP. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. COUP is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note COUP's current valuation metrics, including its Forward P/E ratio of 822.69. For comparison, its industry has an average Forward P/E of 54.51, which means COUP is trading at a premium to the group.

Meanwhile, COUP's PEG ratio is currently 22.17. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Software industry currently had an average PEG ratio of 2.81 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 57, putting it in the top 23% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow COUP in the coming trading sessions, be sure to utilize Zacks.com.


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