Driven by growth in the company’s subscription revenue, revenue grew 40% in the quarter. Quarterly billings jumped 38% over the prior year, and the company’s net income jumped 72.2% during that period.
With these positive developments in mind, let’s take a look at the changes in Coupa’s key risk factors that investors should be aware of.
According to TipRanks Risk Factors ToolCoupa’s two main risk categories are Finance & Corporate and Selling Capacity, contributing respectively to 43% and 22% of the total of the 58 identified risks.
In its recent quarterly report, the company changed a key risk factor in the Selling Ability risk category. Compared to an industry average of 14%, Coupa’s Sell Ability risk factor is 22%.
Coupa noted that its business depends on the company’s ability to deliver customer success through Coupa’s platform, modules and professional services. Coupa’s strategy is to work with partners to increase capacity and capacity to deliver its professional services to clients. (To see Insider Hot Stocks on TipRanks)
The risk remains that if customers are not satisfied with the quality of work delivered, Coupa will incur additional costs, further hampering its profitability. Additionally, Coupa’s ability to retain that particular customer or expand subscription to different modules may be affected, and it may also experience negative publicity.
The Taking of Wall Street
In a major boost for the stock, on December 13, Goldman Sachs analyst Gabriela Borges initiated a hedge on Coupa with a buy rating and a price target of $251 (upside potential of 65.1 %).
Consensus on the Street is a moderate buy based on 12 buys and 8 holds for the action. Coupa Software’s average price target of $222.22 implies a potential upside of 46.2%. This is after a 34.6% decline in stock prices over the past month.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.