Analysts See Sharp Premium On Vista’s Speculated Takeover Of Coupa Software program

• Credit score Suisse analyst Fred Lee reiterated Underperform on Coupa Software program Inc (NASDAQ: COUP) with a $60 worth goal.

• Vista is in talks to accumulate COUP, Bloomberg reported.

• Vista’s founder and CEO lately (Aug-22) mentioned the corporate valuation method on this market.

• He highlighted that the corporate focuses on EV/R/G, buying under the long-term historic common of 0.41.

• Utilizing present development charges within the mid to excessive teenagers would arrive at a share worth within the $45 space.

• The common EV / LTM Rev a number of that Vista paid over the past two years was 9.7x. Vista’s historic M&A spread would indicate a $60 – 70 takeout vary.

• Raymond James analyst Brian Peterson famous that Coupa has persistently been talked about as a SaaS asset that might be enticing to PE patrons. He lengthy considered the asset as a probably enticing takeout candidate.

• That is primarily as a result of Coupa has already amassed a platform that has pushed synergies by means of M&A and could possibly be a automobile for additional M&A past the present Enterprise Spend Administration (BSM) providing.

• He additionally notes that Coupa has not been as aggressive as some software program distributors in ratcheting up pricing or pushing a back-to-base gross sales movement, prioritizing buying new logos.

• In a stricter macro, he thinks the previous could develop into extra crucial to the expansion algorithm, which can be simpler to perform as a personal firm.

• Whereas Coupa additionally has clear FCF margins, any PE takeout would want to think about COUP’s ~$2.2 billion in gross convertible notes, along with his math suggesting internet debt of ~$1.3 billion.

• As for a possible takeout a number of, he pointed to current takeouts for AVLR and PING, supporting a takeout worth of $68 – $80.

• Worth Motion: COUP shares closed larger by 6.38% at $62.69 on Friday.

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