Coupa Software (NASDAQ:COUP) got a slow start after its 2014 IPO. In fact, COUP stock sank in the years after, dropping below $24 in 2017.
However, for the past two years, Coupa Software has been in growth mode. It’s up 314% in the past 24 months, including an impressive 80% spurt so far in 2020. Shares currently trade near $260. Better yet, the novel coronavirus — which spells bad news for most companies — is actually set to boost Coupa’s business.
COUP is an A-rated stock that is well worth looking at for your investment portfolio.
COUP Stock Is Seeing Strong Growth
In March 2019, Coupa Software released fiscal year 2019 results. Annual revenue of $260.4 million was up 39% year-over year. Subscriptions increased 42% compared to the previous year. The company’s 2020 guidance called for revenue of between $325 million and $327 million. Adjusted earnings per share of 18 cents was a big improvement over the 21-cent loss the previous year.
This past March, Coupa’s fiscal 2020 results blew those projections out of the water. The company reported record annual revenue of $389.7 million — up 50% YOY. Subscription revenue was up 48%. Adjusted EPS improved significantly, up to 52 cents.
The company issued full-year fiscal 2021 guidance for revenue between $488 million and $490 million. Clearly, Coupa management is convinced momentum is going to continue, despite the impact of the coronavirus.
COUP stock was at its lowest point of the year on March 16 when that earnings report was released. This was at the height of the March market selloff. On the strength of those numbers, COUP closed at $137.14 the following day, a single-day gain of 25%.
Now trading around $260, shares have increased in value by 138% since mid-March.
Coupa Software Has a Bright Future
The United States is now officially in a recession. In fact, the entire world is now in a recession, and it’s one that could last for years. The lingering effects of the coronavirus pandemic are threatening to turn that into an outright depression.
During tough times, companies are under pressure to rein in their spending. And that impulse plays right into Coupa Software’s strengths. The company’s spending management platform is designed to allow customers to track their spending more efficiently. It offers advanced analytics, AI-powered performance benchmarking, AI-flagging of suspicious activity and the ability to examine their entire operation’s spending in a single dashboard. It’s based in the cloud, which has proven to be a key advantage for any software during coronavirus lockdowns.
Coupa is definitely making the most of this development. Its current tag line is: “In times of business uncertainty, spend smarter.”
Spending smarter starts with tracking expenditures. All expenditures. That means more companies than ever are going to be searching for a solution that upgrades their cost-tracking capability. If it’s cloud-based so that data is available to remote workers, even better. And that will be good news for Coupa Software.
Coupa Software has also been building out its platform to expand beyond expense tracking. For example, customers now have access to Coupa Pay, its business-to-business payments solution.
The company already counts some very high-profile names among its customer base. These include Salesforce (NYSE:CRM), Proctor & Gamble (NYSE:PG), Shopify (NYSE:SHOP) and Nvidia (NASDAQ:NVDA). The fact that its customers come from diverse sectors, and range from relatively small businesses to a rapidly growing e-commerce giant, speaks well to its platform’s appeal and flexibility.
The Bottom Line
There are certain sectors that are seeing more interest as a result of the coronavirus pandemic. For example, biotech stocks are booming. I put together a list of seven biotech stocks that are positioned to score a long-lasting payday if they can bring a coronavirus vaccine to market. But don’t forget there are also less-obvious plays to take advantage of our current situation.
Coupa Software fits in there perfectly. The company has already proven its cloud-based business spending management platform is appealing to a wide range of customers. Over the past two years, it’s been posting big revenue and earnings growth. And with a recession pushing companies to reduce their costs, that customer base is only going to to grow.
COUP stock gets an A rating in my Portfolio Grader, and that makes it well worth considering as part of your portfolio.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.