Here's Why Coupa Software (NASDAQ:COUP) Can Afford Some Debt
Here's Why Coupa Software (NASDAQ:COUP) Can Afford Some Debt
David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. We can see that Coupa Software Incorporated (NASDAQ:COUP) does use debt in its business. But the real question is whether this debt is making the company risky.
What Risk Does Debt Bring?
Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.
See our latest analysis for Coupa Software
What Is Coupa Software's Debt?
The image below, which you can click on for greater detail, shows that at April 2022 Coupa Software had debt of US$2.16b, up from US$1.53b in one year. However, it does have US$786.2m in cash offsetting this, leading to net debt of about US$1.37b.
NasdaqGS:COUP Debt to Equity History August 9th 2022A Look At Coupa Software's Liabilities
We can see from the most recent balance sheet that Coupa Software had liabilities of US$571.3m falling due within a year, and liabilities of US$2.25b due beyond that. Offsetting this, it had US$786.2m in cash and US$186.6m in receivables that were due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by US$1.85b.
Coupa Software has a market capitalization of US$5.86b, so it could very likely raise cash to ameliorate its balance sheet, if the need arose. However, it is still worthwhile taking a close look at its ability to pay off debt. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately the future profitability of the business will decide if Coupa Software can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
Over 12 months, Coupa Software reported revenue of US$755m, which is a gain of 28%, although it did not report any earnings before interest and tax. With any luck the company will be able to grow its way to profitability.
Caveat Emptor
While we can certainly appreciate Coupa Software's revenue growth, its earnings before interest and tax (EBIT) loss is not ideal. Indeed, it lost US$241m at the EBIT level. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. So we think its balance sheet is a little strained, though not beyond repair. We would feel better if it turned its trailing twelve month loss of US$360m into a profit. So we do think this stock is quite risky. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet - far from it. To that end, you should be aware of the 2 warning signs we've spotted with Coupa Software .
Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
大衞·伊本説得很好,波動性不是我們關心的風險,我們關心的是避免資本的永久性損失。因此,當你考慮到任何一隻股票的風險有多大時,你需要考慮債務可能是顯而易見的,因為太多的債務可能會讓一家公司倒閉。我們可以看到Coupa Software Inc.納斯達克(Sequoia Capital:Coup)確實在業務中使用債務。但真正的問題是,這筆債務是否讓該公司面臨風險。
債務會帶來什麼風險?
當一家企業無法輕鬆履行這些義務時,債務和其他債務就會變得有風險,無論是通過自由現金流還是通過以有吸引力的價格籌集資本。資本主義的一部分是“創造性破壞”的過程,破產的企業被銀行家無情地清算。然而,一種更常見(但仍然昂貴)的情況是,一家公司必須以低廉的股價稀釋股東的股份,才能控制債務。話雖如此,最常見的情況是一家公司對債務管理得相當好--並對自己有利。當考慮一家企業使用了多少債務時,首先要做的是把現金和債務放在一起看。
查看我們對Coupa軟件的最新分析
Coupa Software的債務是什麼?
下圖(您可以單擊查看更多詳細信息)顯示,截至2022年4月,Coupa Software的債務為21.6億美元,高於一年內的15.3億美元。然而,它確實有7.862億美元的現金來抵消這一點,導致淨債務約為13.7億美元。
NasdaqGS:政變債轉股歷史2022年8月9日Coupa Software負債情況一瞥
我們可以從最近的資產負債表中看到,Coupa Software有5.713億美元的債務在一年內到期,超過一年的債務有22.5億美元到期。作為抵消,它有7.862億美元的現金和1.866億美元的應收賬款在12個月內到期。因此,它的負債比現金和(近期)應收賬款之和高出18.5億美元。
Coupa Software的市值為58.6億美元,因此如果需要的話,它很可能會籌集現金來改善其資產負債表。然而,仍值得密切關注其償債能力。當你分析債務時,資產負債表顯然是你關注的領域。但最終,該業務未來的盈利能力將決定Coupa Software能否隨着時間的推移加強其資產負債表。所以,如果你關注未來,你可以看看這個免費顯示分析師利潤預測的報告。
在12個月的時間裏,Coupa Software報告了7.55億美元的收入,增長了28%,儘管它沒有報告任何息税前收益。如果運氣好的話,該公司將能夠以增長的方式實現盈利。
告誡買入者
雖然我們當然可以欣賞Coupa Software的收入增長,但其息税前收益(EBIT)虧損並不理想。事實上,它在息税前利潤水平上虧損了2.41億美元。考慮到除了上面提到的債務,我們對公司應該使用如此多的債務沒有太大的信心。因此,我們認為它的資產負債表有點緊張,但並不是無法修復。如果它把過去12個月3.6億美元的虧損扭虧為盈,我們會感覺更好。因此,我們確實認為這隻股票風險很大。當你分析債務時,資產負債表顯然是你關注的領域。然而,並非所有投資風險都存在於資產負債表中--遠非如此。為此,您應該意識到2個警告標誌我們發現了Coupa軟件公司。
當然,如果你是那種喜歡在沒有債務負擔的情況下購買股票的投資者,那麼不要猶豫,今天就來看看我們的淨現金成長型股票獨家名單。
對這篇文章有什麼反饋嗎?擔心內容嗎? 保持聯繫直接與我們聯繫。或者,也可以給編輯組發電子郵件,地址是implywallst.com。
本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。
譯文內容由第三人軟體翻譯。
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