IPO of the Week: Coupa

Josef Schuster
Dr. Josef Schuster is the founder of Chicago-based IPOX Schuster LLC and chief architect of the IPOX® Indexes. The IPOX methodology is implemented in an IPO and spin-off strategy at Catalyst Funds. Before founding IPOX, Dr. Schuster pursued his academic work on European IPOs in the Financial Markets Group (FMG) at the London School of Economics (LSE), where he completed his MSc and PhD and conceived the idea to start IPOX. He regularly appears in the media as an expert in global New Listings and respective investment products.

Company Description

Founded in 2006 and headquartered in San Mateo, CA, Coupa Software provides a cloud-based spend management platform for businesses. The platform consists of procurement, invoicing, expense management and other supporting modules that help companies to manage spend.

Business Model

Coupa Software, follows most of the Software-as-a-Service (SaaS) business model,  generates the majority of revenue from the subscription to the spend management platform. The company also derives professional services revenues from implementation and configuration services.

IPO History

On 10/6/2016, Coupa went public on Nasdaq led by Morgan Stanley, J.P. Morgan, Barclays, and RBC. The IPO was priced at $18.00 per share, high-end of the raised range. With a full subscription of 7.4 million increased offered shares and 15% overallotment option fully exercised, the company was valued at ca. $886 million. The stock opened at $35.00/share, a 94.4% jump, but closed the first day down at $33.28/share.

Historical Performance

Growth Outlook

Industry Comparison

Company

Stock

Symbol

IPO/Spin-off

Date

Initial
Return

Offer to Date

2019

YTD

Beta to S&P

EPS

2018

Revenue

(in millions)

2018 Net Income

(in millions)

P/S
ratio

Coupa

COUP US

10/6/2016

84.89%

640.78%

112.1%

1.47

-$0.96

260.37

-55.52

25.5x

SAP Ariba

ARBA US

Ariba went public on 6/23/1999

Acquired by SAP in 2012 for ca. $4.3 billion, at a 19.55% premium

SAP Concur

CNQR US

Concur Technologies went public on 12/15/1998

Acquired by SAP in 2014 for ca. $7.2 billion, at a 19.67% premium

Jagger

SQI US

SciQuest (known as JAGGAER now) went public in 9/24/2010 with an initial return of 29.16%, was acquired by Accell-KKR in 2016 for $333.10 million, a 33.76% premium