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What's in Store for Coupa Software (COUP) in Q4 Earnings?

Zacks Equity Research

Coupa Software Inc. COUP is set to release fourth-quarter fiscal 2019 results on Mar 11. The company beat the Zacks Consensus Estimate in the trailing four quarters, recording average positive surprise of 46.1%.

Coupa Software reported third-quarter fiscal 2019 non-GAAP earnings of 8 cents per share, in contrast with the Zacks Consensus Estimate of a loss of 3 cents. Notably, the company reported a loss of 5 cents in the year-ago quarter.

Revenues surged 42% from the year-ago quarter to $67.5 million. Further, the figure surpassed the Zacks Consensus Estimate of $63 million. The top line was primarily driven by expanding customer base. Further, rising adoption of Coupa Software’s platform is driving subscription services revenues and gross margin.

What to Expect

For fourth-quarter fiscal 2019, revenues are anticipated between $67.8 and $68.3 million. The Zacks Consensus Estimate for revenues is currently pegged at $68.1 million.

For fiscal 2019, total revenues are now expected between $253 million and $253.5 million. The Zacks Consensus Estimate for revenues is currently pegged at $253.5 million.

Notably, Coupa Software’s shares have soared 91.2% year over year, substantially outperforming the 7.1% rally of the industry.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Coupa Software provides a unified, cloud-based spend management platform that aids enterprises keep a tab on daily expenditures The company’s expanding relationship with Amazon Web Services (“AWS”) bodes well for the company. The deal will enable customers to easily configure their AWS account to send invoices into Coupa Software's platform for touchless digital processing. This move provides greater visibility and efficiency in IT cloud spending.

Further, Coupa Software is benefiting from expanding customer base on the back of growing adoption of spend management platform. Notably, the company added many new customers namely Telenor, Leprino Foods, US Concrete, Wabash National Corporation, Hubert Burda Media, Benteler, to name a few.

Moreover, an expanding partner base is anticipated to drive the top line. The company also launched R20 that leverages Community Intelligence to reduce global supply chain risk and provides customers with new capabilities to optimize spending.

In the last reported quarter, subscription services increased 42% year over year and came in at $60.6 million. Professional services & other revenues increased 51.7% to $6.9 million.

Coupa Software recently announced a strategic partnership with Launchship Technology Solutions. The alliance enables businesses to manage their spend, including contingent workforce spend, within a comprehensive BSM platform.

The company had acquired DCR Workforce, a SaaS application provider. The buyout is aimed at strengthening Coupa Software’s strategy of helping organizations in managing their business spend within a widespread BSM platform.

he company also acquired Aquiire, a real-time supplier catalog search. The acquisition extends Coupa Software’s ability to deliver a comprehensive business-to-business (B2B) shopping know-how across real-time, cached and localized catalog search.

We expect the trend to continue and drive the overall financial performance of Coupa Software.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Coupa has an Earnings ESP of 0.00% and a Zacks Rank #3.

Stocks With Favorable Combination

Here are some companies, which, per our model, have the right combination of elements to beat estimates in their upcoming releases.

Everi Holdings Inc. EVRI has an Earnings ESP of +20.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Momo Inc. MOMO has Earnings ESP of +4.76% and a Zacks Rank #2.

The Cooper Companies, Inc. COO has Earnings ESP of +1.05% and a Zacks Rank #3.

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