Coupa Software (COUP:NAS) Fundamental Valuation Report

Fundamental Valuation Report

Coupa Software(COUP:NAS)


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Close Price/Date
$89.52 (USD) 28/03/2019

Weighted Valuation
$95.50 (USD)

Overall Rating
Undervalued by 6.7%

Valuation Models Analyst Consensus: $95.50 (USD)
(in order of importance)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (COUP:NAS USD)

Price 89.52
Range 87.66 – 91.04
52 week 44.50 – 99.29
Open 89.08
Vol / Avg. 1.03M/2.13M
Mkt cap 5.46B
P/E 0.00
Div/yield 0.00/0.00
EPS -0.96
Shares 61.04M
Beta 0.00

Company Description

Coupa Software Inc is a US-based company providing spend management solutions. The company primarily offers cloud-based spend management platforms through various applications to its clients. Its applications are offered for various purposes which include procurement, invoicing, budgeting, analytics, supplier information management, and contract lifestyle management. Its client base is spread through multiple industries such as healthcare, oil, and gas, industrial, food and beverage.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for COUP:NAS

Using a discounted cash flow model we generated an intrinsic value of $5.03 (USD) for COUP:NAS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

COUP:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $5.03 1% 5% 1% 5%
WACC (or Ke) 16.60 $5.46 $4.66
Terminal Growth Rate 3.00 $4.74 $5.36
Tax Rate 0.19 $5.28 $4.78
Cash Flow 52,855,350 $4.81 $5.25
Capital Expenditures -4,549,000 $5.01 $5.04
Long Term Debt 0 $5.03 $5.03

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $61.27 (USD) for COUP:NAS. We also generated a valuation of $55.74 (USD) using other metrics and comparables.
The comparable companies were Fair Isaac (FICO:NYS), Guidewire Software (GWRE:NYS), j2 Global (JCOM:NAS), Q2 Holdings (QTWO:NYS) and 2U (TWOU:NAS).

Company COUP:NAS End Date Value
Earnings/Share ($0.96) (USD)
Book Value/Share $5.15 (USD)
Sales/Share $4.03 (USD)
Cash Flow/Share $0.45 (USD)
EBITDA/Share ($0.57) (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) 0.0
$67.59 (USD) 0.0
$34.52 (USD) 0.0
$78.66 (USD) 0.0
$0.00 (USD) 0.0
0.00 PE Ratio 41.96 51.10 0.00 32.82 0.00 0.00
18.28 PB Ratio 13.12 31.61 5.02 4.00 18.88 6.08
23.36 PS Ratio 8.56 7.20 9.95 3.45 12.22 9.99
211.38 PCF Ratio 183.32 31.47 50.46 10.36 640.98 0.00
0.00 EV to EBITDA 41.11 30.69 81.04 11.60 0.00 0.00


Using a multiples approach we generated a valuation of  $58.83 (USD) for COUP:NAS

Company COUP:NAS End Date Value
Earnings/Share ($0.96) (USD)
Book Value/Share $5.15 (USD)
Sales/Share $4.03 (USD)
Cash Flow/Share $0.45 (USD)
EBITDA/Share ($0.57) (USD)
Price Based on Comps Adjustment Factor
$0.00 (USD) 0
$57.18 (USD) 0
$48.87 (USD) 0
$70.44 (USD) 0
$0.00 (USD) 0
Ratios Ratio Average
PE Ratio 72.18
PB Ratio 11.10
PS Ratio 12.12
PCF Ratio 158.07
EV to EBITDA 0.00

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  COUP:NAS for the last 2 years was  11.33

We ran the Adjusted Book Value for  COUP:NAS and generated a book value of  $5.18 (USD)
By multiplying these we get an adjusted valuation of  $58.70 (USD)

Analyst Data

In the Stockcalc database there are 4 analysts that provide a valuation for COUP:NAS. The 4 analysts have a concensus valuation for COUP:NAS for 2020 of $95.50 (USD).

COUP:NAS Coupa Software

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
3 0 0 4.7500 Buy 2019-3-27

Current Price: 89.52 USD

Analyst Consensus
USD Millions 2020 2021
Mean EPS 0.11 0.40
# EPS Analysts 3 3
Mean Revenue 328.00 413.60
# Revenue Analysts 3 3
Mean Target Price 95.50
Mean Cash Flow 0.72 0.91
Mean EBITDA 16.30 47.10
Mean Net Income 3.90 21.00
Mean Debt Outstanding
Mean Tax Rate 23.20 23.20
Mean Growth Rate 30.00
Mean Capital Expenditure 9.80 13.20

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.
The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).
The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.
With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.
If we have Analyst coverage for the company we use the consensus target price here.

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