What happened

Coupa Software (NASDAQ:COUP) stock gained ground in November amid a recovery for cloud software stocks. Shares gained 11.6% in the month, according to data from S&P Global Market Intelligence, and the business spending management specialist is now up roughly 143% year to date. 

COUP Chart

COUP data by YCharts.

Coupa stock hit a new lifetime high in October, but the software-as-a-service (SaaS) company's valuation slipped soon after due to sell-offs in the broader cloud software space. Investors moved back into cloud stocks in November as the market rallied and major indexes hit new highs, and Coupa shares benefited from the recovery.

A chart going up from left to right.

Image source: Getty Images.

So what

Coupa stock has posted fantastic performance in 2019 thanks to impressive business momentum. More client partners have joined its platform, total enterprise spend under the company's management has grown at an encouraging clip, and the market has warmed up to the value that its data analysis platform provides.

Cautious guidance from leading cloud software companies including Workday and a string of analyst price cuts for enterprise cloud companies in October prompted sell-offs in the space, pushing Coupa stock down from its lifetime high. Market momentum in November reenergized the stock, and the strong quarterly results it posted on Dec. 2 have helped it weather market volatility this month. 

Now what

Coupa's third-quarter results topped the market's top-and-bottom line performance targets. Sales for the period came in at $101.78 million, beating the average analyst target by roughly $5.6 million. The company recorded earnings per share of $0.20 in the quarter, handily surpassing the average analyst estimate's call for per-share earnings of $0.06.

Management is targeting sales between $101.5 million and $102.5 million for the fourth quarter and non-GAAP (adjusted) earnings per share between $0.03 and $0.06. Full-year revenue is expected to come in between $379.8 and $380.8 million, and adjusted earnings for the year are projected to be between $0.34 and $0.37 per share. Based on management's target, Coupa is valued at roughly 25.5 times expected sales for the year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.