When Will Coupang, Inc. (NYSE:CPNG) Turn A Profit?

Coupang, Inc. (NYSE:CPNG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Coupang, Inc. owns and operates in e-commerce business through its mobile applications and Internet websites primarily in South Korea. The US$22b market-cap company posted a loss in its most recent financial year of US$1.5b and a latest trailing-twelve-month loss of US$1.5b shrinking the gap between loss and breakeven. The most pressing concern for investors is Coupang's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Coupang

Consensus from 10 of the American Online Retail analysts is that Coupang is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$215m in 2024. The company is therefore projected to breakeven around 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 69%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Coupang's growth isn’t the focus of this broad overview, but, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 40% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Coupang to cover in one brief article, but the key fundamentals for the company can all be found in one place – Coupang's company page on Simply Wall St. We've also compiled a list of pertinent factors you should look at:

1. Valuation: What is Coupang worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Coupang is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Coupang’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.