Friday's Headlines: Coupa Software Soars on Takeover Rumors

Friday's Headlines: Coupa Software Soars on Takeover Rumors

Here were the biggest movers in the MyWallSt shortlist yesterday:

Moving Up ⬆️

Coupa Software (COUP) +28.9%

2U (TWOU) +14.6%

IMAX (IMAX) +9.2%

Stitch Fix (SFIX) +8.4%

Tesla, Inc. (TSLA) +7.8%

Moving Down ⬇️

StoneCo (STNE) -7.1%

Autodesk (ADSK) -5.7%

Nordstrom (JWN) -4.2%

Huazhu Hotels Group (HTHT) -2.3%

Core & Main (CNM) -1.8%
 

Coupa Software Soars on Takeover Rumors 🚀

News emerged on Wednesday that private equity firm Vista Equity Partners was considering an acquisition of Coupa Software (COUP). The business spend management platform saw its stock skyrocket by close to 29% on the back of the news. Despite efforts to speak with them, both Vista and Coupa have declined to comment on the rumors thus far.

Vista is a notoriously active private equity firm, having negotiated deals to purchase firms such as software-security firm KnowBe4 Inc. and Avalara — a tax compliance software firm — in October and August respectively. Both of these deals were completed using private credit, a strategy Vista would be expected to utilize again should they pursue a deal here.

Coupa Software currently has a market cap of roughly $4.5 billion following this week’s sudden rise. Despite skyrocketing late on Wednesday, its stock is still sitting down over 64% year-to-date and more than 84% off all-time highs witnessed in February 2021.

It’s clear that any deal is far from imminent, with both firms very much in an exploratory phase right now regarding any acquisition. There’s also the likelihood that this news will spur other potential suitors to kick the proverbial tires on a purchase of Coupa.
 

Macy’s Bobs Along 🛍

What better time to check in with Macy’s than the day after its parade?

While Snoopy, Papa Smurf, and the Pillsbury Doughboy went bobbing down Central Park West, the balloons’ main sponsor was also flying high.

Last week, Macy’s reported a drop in revenue and earnings year-over-year but managed to beat analysts’ expectations across the board. Net sales came in at $5.23 billion compared to $5.2 billion expected, while earnings per share was a healthy 52 cents versus 19 cents projected.

This news was a welcome break for Macy’s which struggled through the pandemic and failed to effectively pivot towards the shop-from-home trend. While its competitors saw demand surge, the 150-year-old department store reported no revenue growth in 2020 or 2021. This prompted management to launch project Polaris, an attempt to refresh the company’s stores, merchandise, and online presence.

So far, Polaris would appear to be working. CEO Jeff Gennette stated younger people were venturing into the chain’s stores, and efforts to revitalize its stock have insulated it from excess merchandise. This has kept profit margins strong while other businesses struggle to shift aging products.

That being said, Macy’s is not immune from macroeconomic headwinds. Similar to reports coming out of big box retailer Target, Macy’s noted a definitive change in consumer behavior at the end of October and beginning of November, purse strings have certainly been tightened. According to Gennette, traffic has remained strong but browsing is not translating into shopping.

Macy’s stock is up more than 13% this week.
 

John Deere Keeps On Motoring 🚜

Deere & Company, the corporation behind the famous John Deere brand, released its latest quarterly earnings report on Wednesday and it made for largely welcome news for shareholders. The firm announced that it expects to see strong demand for its equipment continue into next year as supply chain issues continue to ease globally, while better-than-expected forecasts for 2023 had investors relatively contented.

Earnings per share of $7.44 came in ahead of analyst expectations of $7.11, while revenue of $15.54 billion marked a 37% year-over-year increase. The company also gave a forecast of net income between $8 billion and $8.5 billion for its fiscal year 2023 ending next October — up from a mark of $7.1 billion for the current fiscal year.

Deere & Co. has been one of the few real success stories to emerge in recent times on the stock market. It’s earnings call saw it move up by over 5%, bringing it to a near 25% gain year-to-date. This is in stark contrast to the form of the S&P 500 Index, which currently sits down 16% for the year.

Deere & Co. has benefitted from rising prices for farm equipment and the necessary nature of the industry at large. As CEO John May put it in Wednesday’s earnings call, “the order books continue to fill when we open them.

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