Shares of Coupa Software (COUP -3.81%) fell today after the company reported fourth-quarter and full-year fiscal 2021 results yesterday. Despite a strong quarter, investors may be concerned that the tech sector won't grow as fast as it has over the past year.
The tech stock was down by 5.5% as of 10:22 a.m. EDT on Wednesday.
Coupa reported revenue of $163.5 million in the fourth quarter, an impressive 47% year-over-year increase, and far ahead of Wall Street's consensus estimate of $145.7 million. The company's non-GAAP fourth-quarter earnings per share of $0.17 also easily beat analysts' consensus estimate for a loss of $0.11 per share.
Investors initially pushed up Coupa's stock after the results were released on Tuesday, but then shares began sliding when trading began this morning. Why the reversal?
It may be that Coupa investors are following a larger trend of investors dropping technology stocks in favor of other sectors. The Federal Reserve meets today and will give an update about the financial outlook for the U.S. and any plans it may have to adjust interest rates.
Investors are watching this meeting closely, and some tech investors are concerned that if interest rates increase over the next year, then that could hurt the meteoric rise many tech stocks have experienced over the past 12 months.
While the Fed is likely to keep rates unchanged this time around, some inventors are exiting tech stocks regardless.
Even with today's share price drop, Coupa's stock is still up about 132% over the past 12 months. Despite the company's impressive fourth-quarter results, Coupa investors should probably expect more volatility from this stock -- and other tech stocks -- as investors respond to the Federal Reserve's update today and as the U.S. economy emerges from the pandemic.