Stock market charts and trend lines

Coupa Software stock has just been upgraded to “overweight” by Piper Sandler

The shares of Coupa Software Inc (NASDAQ: COUP) I’ve seen a dramatic sell-off since hitting an all-time high of $ 377.04 in late February. Although it briefly fell below the 320-day moving average at the end of last month, this trendline appears to have drawn in as a region of support. In addition, COUP has a lead of 58.2% year-on-year. While COUP is still struggling with the overhead pressures of $ 280, one analyst views this cap as temporary and is betting on the next leg of Coupa stock.

In particular, Piper Sandler has raised its price target from $ 300 to $ 315 and raised the rating from “neutral” to “overweight”. The analyst cited a favorable risk-reward setup for the stock, adding that the company’s billing growth may accelerate again in the coming quarter, which would also raise revenue estimates for full-year 2022 and 2023. The security is down 1.4% to $ 259.76 despite the bull note, although it looks like the 20-day moving average will keep some of those losses in check.

Most of the brokerage group members are optimistic about COUP. Of the 17 in the coverage, 11 said they were “buy” or better today, compared to six “hold” or worse ratings. The 12 month consensus price target of $ 399.95 represents a premium of 30.1% over current levels.

Options traders have also taken bullish stance on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The security service has a 50-day call / put volume ratio of 1.41, which corresponds to more than 93% of the readings for the last 12 months. This means that calls have been answered much faster than usual in the past 10 weeks.

Speculating on COUP with options might be the way to go. The Schaeffer’s volatility index (SVI) of 45% for the stock is in the low 6th percentile of its annual range, which means these traders are currently pricing in relatively low volatility expectations.

Meanwhile, short interest has declined 1.9% over the last two reporting periods. However, further settlement of these declining bets could result in a short squeeze situation as the 7.18 million short sales sold represent a whopping 11.6% of the stock’s available free float and it would take over a week to hit the average daily pace of COUP is reached trade.

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