Coupang (CPNG) AI Stock Analysis

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Coupang

(NYSE:CPNG)

74Outperform

Coupang demonstrates strong financial health with consistent growth in revenue and profit, supported by solid cash flow and a stable balance sheet. Despite a high valuation suggesting potential overvaluation, the technical indicators show upward momentum. The positive earnings call further underscores growth potential, balancing the risks associated with high operational expenses and developing segment losses.

Positive Factors

Market Share

Coupang is anticipated to gain market share in a favorable competitive environment, supporting its profitability improvement.

Operational Efficiency

EBITDA exceeded expectations by 15%, mainly due to narrower losses and improved operating efficiency in Developing Offerings.

Shareholder Returns

The company authorized a share repurchase of up to US$1bn, demonstrating a strong commitment to shareholder returns.

Negative Factors

Financial Performance

EPS estimates are revised down by 41% due to a higher effective tax rate and fewer tax benefits from net operating loss.

Profitability Challenges

Developing offerings' EBITDA loss is expected to increase in Taiwan, indicating potential challenges in profitability.

Revenue Growth

Revenues missed by 2%, with Product Commerce posting 16% year-over-year FX-neutral growth and Developing Offerings 78% year-over-year.

Coupang (CPNG) vs. S&P 500 (SPY)

Market Cap

$48.22B

Dividend YieldN/A

Average Volume (3M)9.74M

Price to Earnings (P/E)194.6

Beta (1Y)0.85

Revenue Growth20.88%

EPS Growth-80.08%

CountryUS

Employees95,000

SectorConsumer Cyclical

Sector Strength73

IndustrySpecialty Retail

Share Statistics

EPS (TTM)0.06

Shares Outstanding1,657,810,000

10 Day Avg. Volume13,804,325

30 Day Avg. Volume9,743,680

Financial Highlights & Ratios

PEG Ratio-3.59

Price to Book (P/B)11.41

Price to Sales (P/S)0.00

P/FCF Ratio47.30

Enterprise Value/Market Cap0.93

Enterprise Value/Revenue0.40

Enterprise Value/Gross Profit5.10

Enterprise Value/Ebitda13.12

Forecast

1Y Price Target

$29.79

Price Target Upside10.70% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering7

Coupang Business Overview & Revenue Model

Company DescriptionCoupang, Inc. owns and operates in e-commerce business through its mobile applications and Internet websites primarily in South Korea. It operates through two segments, Product Commerce and Growth Initiatives. The company sells various products and services in the categories of home goods and décor products, apparel, beauty products, fresh food and groceries, sporting goods, electronics, and everyday consumables, as well as travel, and restaurant order and delivery services. It also performs operations and support services in China, Singapore, Japan, Taiwan, and the United States. Coupang, Inc. was incorporated in 2010 and is headquartered in Seoul, South Korea.

How the Company Makes MoneyCoupang generates revenue primarily through the sale of goods on its e-commerce platform. The company operates as a first-party retailer, purchasing products in bulk directly from manufacturers and selling them to consumers at a markup. Additionally, Coupang utilizes a third-party marketplace model, allowing external sellers to list and sell their products on the platform, in which it earns commissions on sales. Another significant revenue stream is its subscription service, Rocket WOW, which offers benefits such as free delivery and discounts in exchange for a membership fee. The company also monetizes its logistics and fulfillment services by offering them to third-party sellers and partners. Coupang's earnings are further bolstered by advertising revenue, as brands pay to promote their products on the platform.

Coupang Key Performance Indicators (KPIs)

Any

Active Customers

Active Customers
Measures the number of unique customers who have made a purchase, indicating the company's customer base size and engagement level.

Chart InsightsCoupang's active customer base has shown consistent growth, reaching 23.4 million by Q1 2025, reflecting strong customer engagement and market penetration. This aligns with the company's impressive revenue growth and margin improvements reported in the latest earnings call. Despite increased operational expenses and losses in developing segments, the strategic focus on expanding offerings and a $1 billion share repurchase program indicate confidence in sustaining future growth. The robust increase in active customers supports Coupang's positive outlook and strategic initiatives, particularly in the Product Commerce and Developing Offerings segments.

Data provided by:

Main Street Data

Coupang Financial Statement Overview

Summary

Coupang has shown remarkable growth and improvement in profitability over the years, particularly in 2023. While the company has managed to stabilize its financial position, recent challenges in maintaining profit margins and cash flow volatility indicate areas for attention. The company's focus on operational efficiency and cost management will be crucial in sustaining its upward trajectory.

Income Statement

Positive

Coupang has demonstrated significant revenue growth with a consistent increase over the past years, notably from $6.27 billion in 2019 to $24.38 billion in 2023. The gross profit margin improved significantly to 25.4% in 2023, showing enhanced profitability. However, the recent negative gross profit margin in 2024 indicates potential challenges in cost management. The company has turned profitable with a net income of $1.36 billion in 2023, leading to a net profit margin of 5.6%, although this declined in 2024.

Balance Sheet

Neutral

The company has improved its financial position with increasing stockholders' equity, which reached $4.09 billion in 2023. The debt-to-equity ratio shows a stable leverage position, with total debt decreasing as a proportion of equity. However, the equity ratio indicates room for improvement in financial stability. The equity deficit in earlier years has been addressed, but the recent decline in equity ratio suggests potential risks.

Cash Flow

Positive

Coupang's cash flow from operations has improved, reaching $2.65 billion in 2023, indicating strong cash generation capabilities. The free cash flow turned positive, demonstrating effective capital management. However, fluctuations in free cash flow growth, with a decrease in 2024, highlight potential volatility in cash management. The operating cash flow to net income ratio is healthy, reflecting efficient conversion of earnings into cash.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
30.27B	24.38B	20.58B	18.41B	11.97B
	Gross Profit
8.83B	6.19B	4.71B	2.95B	1.99B
	EBIT
436.00M	473.00M	-65.94M	-1.49B	-527.73M
	EBITDA
1.05B	1.25B	474.70M	-1.29B	-227.58M
	Net Income Common Stockholders
154.00M	1.36B	-92.04M	-1.54B	-474.89M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.88B	5.24B	3.51B	3.49B	1.25B
	Total Assets
15.34B	13.35B	9.51B	8.64B	5.07B
	Total Debt
3.73B	2.79B	2.40B	2.12B	2.24B
	Net Debt
-2.15B	-2.46B	-1.11B	-1.37B	990.22M
	Total Liabilities
11.17B	9.24B	7.10B	6.47B	9.14B
	Stockholders Equity
4.10B	4.09B	2.41B	2.18B	-4.07B
Cash Flow		Free Cash Flow
1.01B	1.76B	-258.82M	-1.08B	-183.08M
	Operating Cash Flow
1.89B	2.65B	565.44M	-410.58M	301.55M
	Investing Cash Flow
-819.00M	-927.00M	-848.25M	-675.52M	-520.65M
	Financing Cash Flow
-69.00M	199.00M	247.35M	3.58B	178.50M

Coupang Technical Analysis

Technical Analysis Sentiment

Positive

Last Price26.91

Price Trends

50DMA

23.01

Positive

100DMA

23.14

Positive

200DMA

23.55

Positive

Market Momentum

MACD

1.17

Negative

RSI

71.40

Negative

STOCH

92.64

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CPNG, the sentiment is Positive. The current price of 26.91 is above the 20-day moving average (MA) of 24.20, above the 50-day MA of 23.01, and above the 200-day MA of 23.55, indicating a bullish trend. The MACD of 1.17 indicates Negative momentum. The RSI at 71.40 is Negative, neither overbought nor oversold. The STOCH value of 92.64 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CPNG.

Coupang Risk Analysis

Coupang disclosed 76 risk factors in its most recent earnings report. Coupang reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Coupang Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BABA	81 Outperform	$308.22B	18.51	13.04%	0.73%	4.28%	28.42%
MELI	80 Outperform	$127.51B	63.07	49.11%	―	41.92%	81.11%
PDD	78 Outperform	$166.29B	11.26	45.06%	―	57.51%	82.28%
JD	77 Outperform	$55.18B	9.09	19.81%	2.74%	8.13%	91.39%
CPNG	74 Outperform	$48.22B	194.58	6.06%	―	20.88%	-80.08%
Sector *	61 Neutral	$7.00B	11.55	3.07%	3.89%	2.60%	-21.53%
GRWG	49 Neutral	$65.45M	―	-36.21%	―	-18.56%	-4.95%

* Consumer Cyclical Sector Average

Performance Comparison

CPNG

Coupang

26.84

3.97

17.36%

MELI

Mercadolibre

2,586.49

847.34

48.72%

34.35

0.08

0.23%

BABA

Alibaba

123.90

39.02

45.97%

GRWG

GrowGeneration

1.13

-1.76

-60.90%

PDD

PDD Holdings

117.84

-25.54

-17.81%

Coupang Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: 12.13%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Positive

The earnings call presented a strong performance in revenue growth and margin improvements, along with significant cash flow and strategic initiatives like the share repurchase program. However, increased operational expenses and losses in developing segments presented challenges. Overall, the highlights slightly outweigh the lowlights, indicating a positive outlook with strategic investments expected to drive future growth.

Q1-2025 Updates

Positive Updates

Strong Revenue Growth

Consolidated revenue grew 11% year-over-year, or 21% on a constant currency basis, showcasing strong market performance and customer engagement.

Improved Margins

Gross profit margin increased by 217 basis points to 29.3%, and adjusted EBITDA margins improved by nearly 90 basis points to 4.8%.

Significant Free Cash Flow

Generated over $1 billion in free cash flow and $1.5 billion in adjusted EBITDA over the trailing 12 months.

Expansion in Product Commerce Segment

Product Commerce segment revenue grew 6% year-over-year, or 16% in constant currency, with significant customer engagement and increased selection.

Developing Offerings Segment Growth

Developing Offering segment revenues grew 67% year-over-year, or 78% in constant currency, driven by strong performance in Eats and Taiwan markets.

Share Repurchase Program Announcement

Board approved a $1 billion share repurchase program as part of a broader capital allocation strategy.

Negative Updates

Increased OG&A Expenses

OG&A expenses increased by nearly 80 basis points over last year due to investments in technology and infrastructure.

Developing Offerings Segment Losses

Developing Offerings experienced Q1 adjusted EBITDA losses of $168 million, with projected full-year losses between $650 million to $750 million.

High Effective Tax Rate

Reported an effective income tax rate of 47%, driven by losses in early-stage operations and nondeductible expenses.

Company Guidance

During the Coupang 2025 First Quarter Earnings Conference Call, the company provided several financial metrics and guidance. Consolidated revenue increased by 11% year-over-year, or 21% on a constant currency basis. Gross profit margin expanded by 217 basis points to 29.3%, and adjusted EBITDA margins improved by nearly 90 basis points to 4.8%. Over the trailing 12 months, Coupang generated $1.5 billion in adjusted EBITDA and over $1 billion in free cash flow. The Product Commerce segment revenue grew by 6% year-over-year, or 16% in constant currency, and the Developing Offering segment saw a 67% year-over-year increase, or 78% in constant currency. The company reported $154 million in operating income, a $114 million year-over-year increase, and $107 million in net income attributable to Coupang stockholders, resulting in $0.06 diluted earnings per share. Additionally, Coupang announced a $1 billion share repurchase program.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.