Coupa Software Incorporated’s (NASDAQ:COUP) Earnings Dropped -37.57%, How Did It Fare Against The Industry?
In this article, I will take a look at Coupa Software Incorporated’s (NASDAQ:COUP) most recent earnings update (30 April 2018) and compare these latest figures against its performance over the past few years, along with how the rest of COUP’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. View out our latest analysis for Coupa Software
Was COUP’s recent earnings decline worse than the long-term trend and the industry?
COUP is loss-making, with the most recent trailing twelve-month earnings of -US$49.22m (from 30 April 2018), which compared to last year has become more negative. Furthermore, the company’s loss seem to be growing over time, with the five-year earnings average of -US$41.17m. Each year, for the past five years COUP has seen an annual increase in operating expense growth, outpacing revenue growth of 37.60%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Scanning growth from a sector-level, the US internet industry has been growing its average earnings by double-digit 17.40% in the previous twelve months, and 18.27% over the past five years. This shows that whatever uplift the industry is deriving benefit from, Coupa Software has not been able to realize the gains unlike its average peer.
Although Coupa Software is loss-making, its has a good cash runway to meet its upcoming operating expense (should SG&A and one-year R&D remain constant at the current level of US$183.13m) over the next year. This is a strong indication of good cash management.
What does this mean?
Coupa Software’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always hard to predict what will occur going forward, and when. The most valuable step is to assess company-specific issues Coupa Software may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Coupa Software to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for COUP’s future growth? Take a look at our free research report of analyst consensus for COUP’s outlook.
Financial Health: Is COUP’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 April 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
