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Coupang (CPNG)
NYSE:CPNG
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Coupang
(NYSE:CPNG)
59Neutral
Positive Factors
Earnings
Adjusted EBITDA of US$421mn was 12% ahead of consensus and 28% ahead of expectations as losses from Developing Offerings were much lower than expected.
Market Share
Coupang continues to gain market share due to improved user experience, growth in active consumers, and increased same-day and dawn deliveries.
Operational Efficiency
Margin recovery is well on track, thanks to improving operational efficiency, scale effect and an on-going industry consolidation favoring the leading retail company.
Negative Factors
Currency Impact
USD-based revenue could be short of consensus, due to steep KRW depreciation against USD amid political uncertainties in Korea.
Regulatory Challenges
Downside risks to 2025 outlook include subdued e-commerce industry growth amid weak macro and regulatory pressure on Eats take-rates.
Revenue Growth
Product commerce revenue growth was below expectations when excluding FX impact.
Coupang (CPNG) vs. S&P 500 (SPY)
Market Cap
$42.14B
Dividend YieldN/A
Average Volume (3M)9.72M
Price to Earnings (P/E)284.6
Beta (1Y)0.71
Revenue Growth24.14%
EPS Growth-88.77%
CountryUS
Employees95,000
SectorConsumer Cyclical
Sector Strength48
IndustrySpecialty Retail
Share Statistics
EPS (TTM)0.08
Shares Outstanding1,647,684,600
10 Day Avg. Volume7,719,517
30 Day Avg. Volume9,719,041
Financial Highlights & Ratios
PEG Ratio0.30
Price to Book (P/B)N/A
Price to Sales (P/S)1.39
Price to Cash Flow (P/CF)15.60
P/FCF Ratio15.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$29.36Price Target Upside24.46% 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 Financial Statement Overview
Summary
Coupang has experienced substantial revenue growth and improved profitability, especially in 2023. However, recent issues with declining profit margins and cash flow volatility present challenges. Continued focus on operational efficiency and cost management is needed.Income Statement
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 2024.65
Positive
Balance Sheet
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.55
Neutral
Cash Flow
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.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| 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 |
| 3.24B | 2.79B | 2.40B | 2.12B | 2.24B | Net Debt |
| -2.64B | -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
Positive
23.59
Price Trends
23.35
Positive
23.71
Negative
23.19
Positive
Market Momentum
-0.13
Negative
52.42
Neutral
83.05
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 23.59 is above the 20-day moving average (MA) of 23.23, above the 50-day MA of 23.35, and above the 200-day MA of 23.19, indicating a bullish trend. The MACD of -0.13 indicates Negative momentum. The RSI at 52.42 is Neutral, neither overbought nor oversold. The STOCH value of 83.05 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $319.45B | 19.00 | 11.97% | 0.72% | 4.28% | 28.42% | |
78 Outperform | $66.63B | 11.30 | 17.55% | 1.75% | 5.20% | 77.60% | |
76 Outperform | $106.22B | 56.62 | 51.50% | ― | 43.56% | 91.72% | |
73 Outperform | $2.15T | 36.81 | 24.29% | ― | 10.99% | 91.61% | |
59 Neutral | $12.50B | 11.24 | 1.20% | 3.72% | 1.27% | -20.93% | |
59 Neutral | $42.14B | 284.56 | 3.76% | ― | 24.14% | -88.77% |
* Consumer Cyclical Sector Average
Performance Comparison
CPNG
Coupang
23.59
5.99
34.03%
AMZN
Amazon
203.26
24.96
14.00%
MELI
Mercadolibre
2,134.31
596.85
38.82%
JD
JD
42.57
16.93
66.03%
BABA
Alibaba
134.48
64.50
92.17%
SHOP
Shopify
109.28
30.75
39.16%
Coupang Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -2.40% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call reflects significant growth in revenue and gross profit, successful expansion of delivery services, and positive international market performance. However, challenges such as the weakening of the Korean won, high effective tax rates, and increased OG&A expenses due to acquisitions and restructuring impacts were noted.Highlights
Strong Revenue and Profit Growth
Net revenues grew by nearly $6 billion or 23% in constant currency over the past 12 months. Gross profit grew 29%, excluding Farfetch and the FC fire insurance gain. Adjusted EBITDA was $1.4 billion with margins expanding to 4.5%.
Expansion of Delivery Services
Significant upgrades to fulfillment and logistics increased same-day or dawn deliveries by 45%. Next-day Rocket Delivery was expanded to include installation services for large appliances and other items.
Automation and Technology Investments
Investments in robotics and automation nearly doubled the portion of highly automated logistics infrastructure, improving line-haul costs by 16% and increasing productivity.
International Market Success
Taiwan operations saw a 23% quarter-over-quarter growth in net revenues in Q4 2024, with the launch of the WOW membership program indicating strong customer response.
Turnaround of Farfetch
The acquisition of Farfetch led to a turnaround from significant losses to a breakeven run rate, maintaining scale with 49 million monthly visitors across 190 countries.
Product Commerce Segment Growth
Product Commerce segment revenue grew 9% year-over-year, with a 16% growth in constant currency. Gross profit grew 31% with a margin of 32.7%.
Lowlights
Weakening of Korean Won
The Korean won weakened to its lowest levels in over 10 years, significantly impacting reported revenue growth.
High Effective Tax Rate
Reported an effective income tax rate of 53% due to consolidation of pretax losses in Farfetch and certain nondeductible expenses.
Increased OG&A Expenses
OG&A expenses increased over 370 basis points year-over-year, excluding insurance gains, due to Farfetch acquisition and restructuring costs.
Company Guidance
During the Coupang 2024 Fourth Quarter Earnings Conference Call, the company provided guidance for 2025, indicating expectations for constant currency consolidated growth rates to be around 20% year-over-year. This includes anticipated Q1 growth rates consistent with Q4 2024, excluding Farfetch. Gross profit is expected to outpace revenue growth due to the faster growth of the Fulfillment by Coupang (FLC) offering. The company aims for adjusted EBITDA margin expansion annually, with a focus on leveraging automation and technology. Developing Offerings are projected to incur adjusted EBITDA losses between $650 million and $750 million in 2025. Farfetch is expected to maintain profitability after operational improvements, while investments continue in areas like AI and automation to enhance customer experience and operational efficiency. The company's investment strategy remains disciplined, prioritizing opportunities with clear customer demand and operational excellence.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.