Analysts Have Been Trimming Their Coupang, Inc. (NYSE:CPNG) Price Target After Its Latest Report

There's been a notable change in appetite for Coupang, Inc. (NYSE:CPNG) shares in the week since its full-year report, with the stock down 16% to US$21.10. The results overall were pretty much dead in line with analyst forecasts; revenues were US$18b and statutory losses were US$1.08 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Coupang

After the latest results, the eleven analysts covering Coupang are now predicting revenues of US$23.3b in 2022. If met, this would reflect a huge 26% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 26% to US$0.65. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$24.2b and losses of US$0.62 per share in 2022. So it's pretty clear consensus is more negative on Coupang after the new consensus numbers; while the analysts trimmed their revenue estimates, they also administered a pronounced increase to per-share loss expectations.

The consensus price target fell 5.5% to US$30.64, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Coupang, with the most bullish analyst valuing it at US$52.00 and the most bearish at US$25.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Coupang's revenue growth is expected to slow, with the forecast 26% annualised growth rate until the end of 2022 being well below the historical 40% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 14% per year. Even after the forecast slowdown in growth, it seems obvious that Coupang is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Coupang. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Coupang's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Coupang analysts - going out to 2024, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Coupang , and understanding them should be part of your investment process.

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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.