On Wednesday, Coupa Software Inc. (NASDAQ:COUP) shares edged lower 2.70% despite reporting a solid Q2 performance. The company announced its most recent quarterly results Tuesday after markets closed, beating analyst expectations on revenue and earnings.
Coupa Software also issued better-than-expected Q3 and full-year guidance on revenue and earnings.
The company posted non-GAAP earnings per share of $0.26, beating the consensus Street estimate of -$0.06. Moreover, its GAAP EPS of -$1.24 also outperformed the expectation of -$1.42, while revenue for the quarter grew 42.4% from the same quarter last year to $179.25 million, $16.27 million better than estimates.
Coupa Software’s Q3 revenue guidance of $177 million to $178 million, was also better than the Street forecast of $168.84 million, while its predicted non-GAAP EPS of $0.01 to $0.03, also topped analyst estimates of -$0.06.
Is the COUP stock price pullback an opportunity to buy?
Coupa Software shares are down more than 23% this year following Wednesday’s pullback. However, the stock still trades at a steep forward P/E ratio of about 483.17, making it less attractive to value investors.
Nonetheless, analysts expect COUP earnings per share to grow by a whopping 460% next year and at an average annual rate of 21% over the next five years. Therefore, growth investors could find the stock compelling after smashing Q2 expectations.
However, the stock still trades several levels above analyst price targets with the latest update from RBC Capital Markets analysts, who downgraded to neutral with a price target of $210 per share.
Source – TradingView
Coupa Software faces trendline resistance
Technically, Coupa Software shares appear to be facing solid trendline resistance in the intraday chart. As a result, the stock price pulled back after reaching overbought conditions of the 14-day RSI.
Therefore, investors can target extended pullback profits around the 100-day moving average level at $236.36 or lower at $216.13. On the other hand, if the stock breaks out upwards, it could find resistance at $277.58 and $297.03.
Is Coupa Software stock poised for an extended pullback?
In summary, although analysts predict massive earnings growth for Coupa Software, the stock trades at steep valuation multiples, making it less attractive to investors. Moreover, COUP shares seem to be facing trendline resistance, thereby creating an exciting opportunity on the downside.
Therefore, with shares pulling back despite an exciting quarterly performance, Coupa Software’s current downward movement could appear poised to continue.
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