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.
大卫·伊本说得很好,波动性不是我们关心的风险,我们关心的是避免资本的永久性损失。因此,当你考虑到任何一只股票的风险有多大时,你需要考虑债务可能是显而易见的,因为太多的债务可能会让一家公司倒闭。我们可以看到Coupa Software Inc.纳斯达克(Sequoia Capital:Coup)确实在业务中使用债务。但真正的问题是,这笔债务是否让该公司面临风险。
债务会带来什么风险?
当一家企业无法轻松履行这些义务时,债务和其他债务就会变得有风险,无论是通过自由现金流还是通过以有吸引力的价格筹集资本。资本主义的一部分是“创造性破坏”的过程,破产的企业被银行家无情地清算。然而,一种更常见(但仍然昂贵)的情况是,一家公司必须以低廉的股价稀释股东的股份,才能控制债务。话虽如此,最常见的情况是一家公司对债务管理得相当好--并对自己有利。当考虑一家企业使用了多少债务时,首先要做的是把现金和债务放在一起看。
查看我们对Coupa软件的最新分析
Coupa Software的债务是什么?
下图(您可以单击查看更多详细信息)显示,截至2022年4月,Coupa Software的债务为21.6亿美元,高于一年内的15.3亿美元。然而,它确实有7.862亿美元的现金来抵消这一点,导致净债务约为13.7亿美元。
NasdaqGS:政变债转股历史2022年8月9日Coupa Software负债情况一瞥
我们可以从最近的资产负债表中看到,Coupa Software有5.713亿美元的债务在一年内到期,超过一年的债务有22.5亿美元到期。作为抵消,它有7.862亿美元的现金和1.866亿美元的应收账款在12个月内到期。因此,它的负债比现金和(近期)应收账款之和高出18.5亿美元。
Coupa Software的市值为58.6亿美元,因此如果需要的话,它很可能会筹集现金来改善其资产负债表。然而,仍值得密切关注其偿债能力。当你分析债务时,资产负债表显然是你关注的领域。但最终,该业务未来的盈利能力将决定Coupa Software能否随着时间的推移加强其资产负债表。所以,如果你关注未来,你可以看看这个免费显示分析师利润预测的报告。
在12个月的时间里,Coupa Software报告了7.55亿美元的收入,增长了28%,尽管它没有报告任何息税前收益。如果运气好的话,该公司将能够以增长的方式实现盈利。
告诫买入者
虽然我们当然可以欣赏Coupa Software的收入增长,但其息税前收益(EBIT)亏损并不理想。事实上,它在息税前利润水平上亏损了2.41亿美元。考虑到除了上面提到的债务,我们对公司应该使用如此多的债务没有太大的信心。因此,我们认为它的资产负债表有点紧张,但并不是无法修复。如果它把过去12个月3.6亿美元的亏损扭亏为盈,我们会感觉更好。因此,我们确实认为这只股票风险很大。当你分析债务时,资产负债表显然是你关注的领域。然而,并非所有投资风险都存在于资产负债表中--远非如此。为此,您应该意识到2个警告标志我们发现了Coupa软件公司。
当然,如果你是那种喜欢在没有债务负担的情况下购买股票的投资者,那么不要犹豫,今天就来看看我们的净现金成长型股票独家名单。
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本文由Simply Wall St.撰写,具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论,我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议,也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意,我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。
译文内容由第三方软件翻译。
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