Coupa is going to be an acquired taste, however we would encourage you to look past the p/sales multiple.
The crux: sales growth looks to be accelerating, at least for a short period of time, and yet the business is is seeing very solid operating leverage. This is because system integrators such as KPMG and Accenture are driving the growth, accounting for 80% of new sales.
Coupa sells back-office software and is disrupting a market that has a TAM of at least 20x current revenues.
It is a unique asset with a strong competitive position, offering a purchasing advantage to its customers.
Sells to enterprises based on high, measurable ROI. ERP-like sticky business.
We see a clear potential for current 40+% growth to sustain for several years (vs consensus estimating a sharp slowdown).
Potential Upside: $180 (+45%)
Sensible Downside: $86 (-30%)
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