Why Coupa Software Bounced Back Strongly Today
Beaten-down software company Coupa Software (NASDAQ: COUP) was bouncing back in a big way on Monday, up nearly 12% as of 12:30 p.m. ET.
While there was no company-specific news that came out today, another peer in the enterprise software sector was scooped up by a private equity firm over the weekend. After a 65% plunge from all-time highs about a year ago culminating in another brutal post-earnings sell-off last week, investors may be thinking Coupa could be the next software target to get scooped up.
One would think Coupa's software sales would be booming right now, since its products help businesses optimize supply chains and connect businesses with suppliers. However, after a burst of digitization during the pandemic, some software companies are seeing things slow down as the economy normalizes. In addition, global inflation is pushing up interest rates, which are a killer for high-growth but unprofitable stocks such as Coupa. Yes, Coupa is posting break-even to slight profits on an adjusted basis, but when you factor in stock-based compensation, it still posted a $244 million operating loss according to generally accepted accounting principles (GAAP) in 2021.
Source Fool.com