Should you buy or sell Coupa Software stock after a solid earnings beat?

By:
on Dec 7, 2021
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  • Coupa Software shares on Tuesday edged slightly lower after FQ3 results.
  • The company announced its most recent quarterly results Monday after markets closed.
  • Coupa outperformed analyst expectations on revenue and earnings

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On Tuesday, Coupa Software Inc. (NASDAQ:COUP) shares opened the session higher, erasing Monday’s after-hours declines, before pulling back later for a slight mid-day decline. The company announced its most recent quarterly results Monday after markets closed, outperforming the consensus analyst expectations on revenue and earnings. 

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Coupa posted FQ3 non-GAAP earnings per share of $0.31, outperforming the consensus for Street expectations of $0.02. On the other hand, its GAAP EPS of -$1.23 outperformed the average for analyst estimates of -$1.32, while revenue for the quarter increased by 39.8% from the same quarter in 2020 to $185.82 million, exceeding the consensus analyst expectation by 7.94 million.

Time to bet on Coupa’s exciting growth?

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From an investment perspective, Coupa Software shares trade at a steep forward P/E ratio of 266.62, making it a less attractive option for value investors. 

However, analysts are optimistic about its growth prospects, forecasting its EPS to increase by more than 103% next year, before rising at an average annual rate of about 34.50% over the next five years. 

Therefore, the stock could be an exciting option for growth investors.

Source – TradingView

Technically, Coupa Software shares seem to be trading within a descending channel formation in the intraday chart. As a result, the stock has plummeted into the oversold conditions of the 14-day RSI.

Therefore, investors could target rebound profits at about $186.56, or higher at $203.54, while $162.41 and $143.06 are support levels.

In summary, with Coupa stock falling to oversold conditions, now could be a good time to pounce on its exciting growth prospects.

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