Finance and HR Software Stocks Q1 Teardown: Coupa (NASDAQ:COUP) Vs The Rest


Adam Hejl /
2022/07/01 3:31 am EDT

The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how Coupa (NASDAQ:COUP) and the rest of the finance and HR software stocks fared in Q1.

Organizations are constantly looking to improve organizational efficiencies, whether it is financial planning, tax management or payroll. Finance and HR software benefit from the SaaS-ification of businesses, large and small, who much prefer the flexibility of cloud-based, web-browser delivered software paid for on a subscription basis than the hassle and expense of purchasing and managing on-premise enterprise software.

The 17 finance and HR software stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 3.17%, while on average next quarter revenue guidance was 2.1% above consensus. The technology sell-off has been putting pressure on stocks since November, but finance and HR software stocks held their ground better than others, with share price down 7.62% since earnings, on average.

Coupa (NASDAQ:COUP)

Founded in 2006 by former Oracle executives, Coupa Software (COUP) is a software as a service platform that helps enterprises manage their spending across procurement, billing and business expenses and get a better visibility into how the money is spent.

Coupa reported revenues of $196.3 million, up 17.6% year on year, beating analyst expectations by 2.98%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a decline in gross margin.

"We began the fiscal year strong by delivering record quarterly total revenue and subscription revenue, and also yielding over 20% operating cash flow and adjusted free cash flow margins," said Rob Bernshteyn, chairman and chief executive officer at Coupa.

Coupa Total Revenue

Coupa delivered the weakest full year guidance update of the whole group. The stock is down 20.9% since the results and currently trades at $57.

Read our full report on Coupa here, it's free.

Best Q1: Flywire (NASDAQ:FLYW)

Originally created to process international tuition payments for universities, Flywire (NASDAQ:FLYW) is a cross border payments processor and software platform focusing on complex, high-value transactions like education, healthcare and B2B payments.

Flywire reported revenues of $64.5 million, up 43.4% year on year, beating analyst expectations by 13.5%. It was an exceptional quarter for the company, with an impressive beat of analyst estimates and a very optimistic guidance for the next quarter.

Flywire Total Revenue

Flywire pulled off the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is down 16.5% since the results and currently trades at $17.63.

Is now the time to buy Flywire? Access our full analysis of the earnings results here, it's free.

Slowest Q1: Zuora (NYSE:ZUO)

Founded in 2007, Zuora (NYSE:ZUO) offers software as a service platform that allows companies to bill and accept payments for recurring subscription products.

Zuora reported revenues of $93.1 million, up 16% year on year, beating analyst expectations by 1.03%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and decelerating growth in large customers.

The stock is down 8.81% since the results and currently trades at $8.69.

Read our full analysis of Zuora's results here.

Workiva (NYSE:WK)

Founded in 2010, Workiva (NYSE:WK) offers software as a service product that makes financial and compliance reporting easier, especially for publicly traded corporations.

Workiva reported revenues of $129.6 million, up 24.4% year on year, beating analyst expectations by 1.76%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and decelerating customer growth.

The company added 3 enterprise customers paying more than $100,000 annually to a total of 1,124. The stock is down 29.9% since the results and currently trades at $65.99.

Read our full, actionable report on Workiva here, it's free.

Paylocity (NASDAQ:PCTY)

Founded by payroll software veteran Steve Sarowitz in 1997, Paylocity (NASDAQ:PCTY) is a provider of payroll and human resources software for small and medium-sized enterprises.

Paylocity reported revenues of $245.9 million, up 32.2% year on year, beating analyst expectations by 1.79%. It was a very strong quarter for the company, with a significant improvement in gross margin.

The stock is down 8.38% since the results and currently trades at $173.19.

Read our full, actionable report on Paylocity here, it's free.

The author has no position in any of the stocks mentioned