Investors bid Coupa Software (NASDAQ:COUP) up US$1.1b despite increasing losses YoY, taking five-year CAGR to 17% – Simply Wall St

When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But on a lighter note, a good company can see its share price rise well over 100%. For example, the Coupa Software Incorporated (NASDAQ:COUP) share price has soared 124% in the last half decade. Most would be very happy with that. It's also good to see the share price up 28% over the last quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

Though if you're not interested in researching what drove COUP's performance, we have a free list of interesting investing ideas to potentially inspire your next investment!

Coupa Software isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

For the last half decade, Coupa Software can boast revenue growth at a rate of 31% per year. That's well above most pre-profit companies. So it's not entirely surprising that the share price reflected this performance by increasing at a rate of 17% per year, in that time. This suggests the market has well and truly recognized the progress the business has made. Coupa Software seems like a high growth stock - so growth investors might want to add it to their watchlist.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Coupa Software is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.

We regret to report that Coupa Software shareholders are down 71% for the year. Unfortunately, that's worse than the broader market decline of 16%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 17%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Coupa Software better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Coupa Software (of which 1 is significant!) you should know about.

Of course Coupa Software may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Find out whether Coupa Software is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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Investors bid Coupa Software (NASDAQ:COUP) up US$1.1b despite increasing losses YoY, taking five-year CAGR to 17% - Simply Wall St

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