What happened
For the second day in a row, Coupa Software's (COUP) share price dived significantly on Tuesday. The company's stock fell a queasy 19%, "thanks" to a raft of downward adjustments by analysts in the wake of the latest quarterly earnings report.
So what
A platoon of analysts, it seems, weighed in negatively on Coupa's latest performance, with many cutting their price target on the shares. Two analysts went so far as to downgrade their recommendations.
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One of these was Oppenheimer's Brian Schwartz, for whom Coupa stock is now merely perform (neutral), down from his previous estimation of outperform (buy).
In a new research note, Schwartz wrote, "There is a lot to like with Coupa, but the story and business has many moving parts and more exposure to Europe than other [small- to] mid-cap [software-as-a-service] names, and this is leading to significant organic growth deceleration and margin contraction as reminded with the [full-year] 2023 guidance."
Piper Sandler analyst Brent Bracelin joined his Oppenheimer peer in downshifting his recommendation to neutral from overweight (buy). Bracelin also drastically lowered his price target on the tech stock, from $230 per share to $70.
Not every analyst has expressed disappointment on Coupa, though. Needham's Ryan McDonald reiterated his buy recommendation, although he cut his price target to $90 from the preceding $210.
McDonald pointed out in a new research note that "Coupa reiterated its commitment to mid-20s [percentage] organic billings growth in the near-term, and we see the potential for upside to this initial outlook for the top and bottom line."
Now what
The largely negative reaction was entirely justified. Monday morning, Coupa announced its fourth-quarter 2021 earnings. While the company recorded gains in revenue and profitability, and topped analyst expectations, its guidance for both the current quarter and full-year 2022 fell well short of estimates for the most part.
