CPNG Stock Overview
Coupang, Inc. owns and operates in e-commerce business through its mobile applications and Internet websites primarily in South Korea.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$17.75|
|52 Week High||US$30.94|
|52 Week Low||US$8.98|
|1 Month Change||6.03%|
|3 Month Change||39.22%|
|1 Year Change||-37.12%|
|3 Year Change||n/a|
|5 Year Change||n/a|
|Change since IPO||-63.96%|
Recent News & Updates
Coupang: Investors Welcome Its New Focus On Profits
Summary Coupang is moving its narrative away from a growth business, to a profitable enterprise with some growth. In the current market, investors are going to welcome this new focus. Even though its shareholder base will have to change to one with lower expectations. I estimate that Coupang could exit Q4 2023 on a run rate of $500 million to $700 million of EBITDA. This would put the company priced at 62x to 44x next year's EBITDA. And I believe that this multiple would rapidly move lower as we get to 2024. In conclusion, I am bullish on this name. Investment Thesis Coupang (CPNG) is down 60% since its IPO. Even though investors' enthusiasm for Coupang has mostly gone, I believe that its stock offers investors a rewarding investment opportunity. In my previous article I said, "Coupang's revenue growth rates are rapidly slowing and leave much to be desired. That is a headline risk." And while I recognize that I was too early to call the bottom on this name, I believe that this time it's different. Author's work Coupang has been focusing its narrative away from its topline growth to a strategy of profitable growth. And it's easy to see that it's succeeding. All considered I believe that 1x next year's revenues, is an attractive valuation for a business that clearly has a moat around its operations. Revenue Growth Rates Rapidly Slow Down CPNG revenue growth rates On the surface, the graphic above doesn't inspire much confidence. It's a business that is consistently slowing down its revenue growth rates. But when we spend a little more time, we can see two different conclusions. In the first case, not shown above, is that on a currency-adjusted basis, revenues were up 27% y/y. That's clearly a fair revenue growth rate. Secondly, last year's comparisons were really tough. Particularly H1 2021. For the remainder of 2022, the comparisons rapidly become significantly better. What's Next For Coupang? Coupang is a Korean eCommerce player. Coupang aims to be the fastest e-commerce delivery service in Korea. As Coupang's founder and CEO says, Coupang wants to wow its customers, going so far as to call its version of Prime customers, WOW members. In an effort to wow customers, it continues to find ways to get more mindshare with its customers, by offering free Rocket deliveries (grocery offering), and free Coupang Play video content. As you know, Korea's population is small, at approximately 51 million. CPNG Q2 2022 But Coupang's mission isn't on getting to saturation. In the table above we see the bull case depicted. Cross-selling into its Active Customer base was up 20% y/y at constant currency, green arrow. Clearly, customers are resonating with Coupang. There's no other reason why this far into lapping Covid, customers would be increasing their average order value. What's more, keep in mind what Coupang proclaims, While we've grown to significant scale, we remain a small portion of what is expected to soon become the third largest e-commerce opportunity in the world. We are eyeing up a business that could well become a leading e-commerce player in the third largest e-commerce country in the world, ahead of Japan and the UK. I believe that the best way to ensure wallet share with consumers throughout the economic cycle is by being the low-cost platform, something that KPNG found to be in a recent study. At its core, that's a moat that is not so different from other investors' favorites such as Costco (COST). Path to Profitability Continues to Pick Up Momentum As I've maintained for a while, Coupang had expected to exit Q4 with EBITDA profitability, so that it would enter 2023 EBITDA profitable. However, given that the first half of 2022 saw a negative $25 million of EBITDA, the best that Coupang could previously offer was to reach under negative $400 million of EBITDA for 2022. This was the guidance provided back in Q4 2020. But this has now all changed. Indeed, Coupang now declares that rather than 2022 seeing a less than negative $400 million, it would actually finish the year at breakeven, an approximate $400 million improvement from its Q4 2021 guidance. It now seems very possible that when Coupang exits Q4 2023, it could be on a run rate of at least $500 million of EBITDA. That would put the stock priced at 62x next year's EBITDA.
Coupang, Inc. (NYSE:CPNG) Shares Could Be 48% Below Their Intrinsic Value Estimate
In this article we are going to estimate the intrinsic value of Coupang, Inc. ( NYSE:CPNG ) by taking the expected...
Coupang: Turning The Corner Toward Sustained Profitability
Coupang is the largest e-commerce business in South Korea, the fifth-largest e-commerce market in the world. Coupang's market share has increased each quarter since their IPO, and their product commerce segment grew at four times the rate of the South Korean market in Q2. Coupang reported strong gross margin and adjusted EBITDA margin expansion in Q2 due to increased operational efficiencies and a tighter focus on profitable growth with developing offerings. Coupang is well-placed to achieve their long-term guidance of 7-10%+ adjusted EBITDA margins. Coupang has a strong balance sheet and trades at an attractive valuation relative to their listed peers. Coupang, Inc. (CPNG) is the largest e-commerce business in South Korea, the fifth-largest e-commerce market in the world behind China, the U.S., UK, and Japan. The business was founded in 2010 by CEO Bom Kim and has grown rapidly to become a $32b behemoth offering a range of services across both their product commerce and developing offerings business segments. Product Commerce Segment Developing Offerings Segment 1P and 3P e-commerce (South Korea) 1P and 3P e-commerce (international markets) Rocket Fresh (grocery delivery) Coupang Eats (food delivery) Advertising Coupang Play (video streaming) Wow membership service Fintech (payments revenue) Coupang has expanded into a whole host of verticals outside of e-commerce in the South Korean market, however, as of their latest quarter (Q2 2022), 97% of Coupang's net revenue was still generated from their core product commerce segment. Thus, while their developing offerings are exciting and increase their total addressable market ("TAM"), Coupang remains essentially an e-commerce and grocery delivery business. Despite attracting esteemed investors in the private markets, such as Sequoia Capital, SoftBank (TYO:9984), and BlackRock (BLK), Coupang has had a tough time in the public markets. Shares are down 36% so far in 2022 and 62% since their IPO in March 2021. CPNG data by YCharts Admittedly, some of the fall in Coupang's share price is due to external factors (e.g., a broader macroeconomic slowdown and sudden disdain for tech businesses), but some is also undoubtedly the result of Coupang's "Amazon-esque" (NASDAQ:AMZN) vision to prioritize growth in long-term free cash flows over appeasing investors with short-term profitability. See the below quote from CEO Bom Kim in their latest earnings call. Sound familiar? Cue Jeff Bezos. One, we exist to deliver new moments of wow for customers. Two, we don't start with what looks easy. We work backwards from imagining jaw-dropping customer experiences and we embrace the hard work required to challenge trade-offs that customers take for granted. Three, we will employ technology, process innovation and economies of scale to create amazing customer experiences and drive operating leverage and significant cash flows over time. Four, we always prioritize growth and long-term cash flows. And five, we are disciplined capital allocators. We start with small investments, then test and iterate rigorously. We invest more capital over time in opportunities that have the best long-term cash flow potential (CEO Bom Kim, Q2 2022 Earnings Call). In response to the COVID-induced surge in e-commerce demand throughout 2020/2021, Coupang invested aggressively to build out their logistics and fulfilment capabilities, resulting in sharply negative operating margins. However, as Coupang has now completed this major CapEx cycle, both their gross and adjusted EBITDA margins have rapidly improved, resulting in a cleaner picture for investors and more confidence in their path to sustained profitability. Coupang CapEx (Coupang Investor Presentation March 2022) In this article, I discuss Coupang's latest Q2 2022 results and why I think the business remains a buy, even after the almost 100% rise in share price over the past three months. Growth is slowing, but Coupang continues to gain market share On the surface, the rapid deceleration in Coupang's revenue growth might appear a cause for concern. After 15 straight quarters of 50%+ YoY revenue growth (ending Q3 2021), Coupang's growth rate has consistently fallen each quarter to a low of 12% YoY growth in Q2 2022. Quarter Revenue Growth (No FX Adjustments) Revenue Growth (Constant Currency) Q1 2021 74% 63% Q2 2021 71% 57% Q3 2021 48% 44% Q4 2021 34% 39% Q1 2022 22% 32% Q2 2022 12% 27% However, context is important. While currency tailwinds were supporting Coupang through the first three quarters of 2021, this trend has flipped and Coupang has experienced significant currency headwinds throughout the first two quarters of 2022. In constant currency terms, Coupang grew revenues 27% YoY in Q2, a healthy growth rate given: (1) their scale as the dominant e-commerce business in South Korea; (2) the tough comp being elapsed in Q2 2021 where Coupang grew revenues 71% YoY (57% in constant currency); and (3) their deliberate strategic decision to pull back on growth in their developing offerings to optimize for profitability. CPNG Revenue ((TTM)) data by YCharts It is also important to consider whether Coupang's market share is increasing or decreasing. The answer to this question is clear. Coupang is the leader in the South Korean e-commerce market and their competitive position has only strengthened since IPO, with product commerce revenues growing at more than four times the rate of the broader market in Q2. See the below comments from CEO Bom Kim in their latest earnings call: Product Commerce revenues grew at 27% year-over-year and 3% quarter-over-quarter on a constant currency basis. In contrast, the broader product e-commerce segment in Korea grew 6% year-over-year and 0% quarter-over-quarter. Our share of product e-commerce growth has increased every quarter since we've gone public and this quarter was no exception, setting a new record (CEO Bom Kim, Q2 2022 Earnings Call). Why is Coupang gaining market share? The answer is simple. They are following the classic Amazon playbook of offering greater convenience and lower prices for their customers. For example, Rocket Fresh customers who order groceries before midnight will receive their order before 7 AM the following morning. When is Coupang coming to Australia!? In addition to providing unmatched delivery and service levels, we continue to offer the best prices to our customers. A recent study by KPMG found Coupang to have a 25% to 60% average price advantage compared to major competitors for top-selling items across the categories surveyed (CEO Bom Kim, Q2 2022 Earnings Call). Increasing product penetration within their existing customer base Until Q1 2022, Coupang had grown their total active customer count by at least 20% YoY for 16 straight quarters. However, as global markets (South Korea included) entered a macroeconomic slowdown, Coupang's growth in active customer count has decreased substantially to 13% YoY in Q1 2022 and 5% YoY (with a 1% QoQ decline) in Q2 2022. However, it is logical that at Coupang's scale of 17.9m active customers (vs. a TAM of around 37m Korean online shoppers), a more realistic medium-term growth rate in active customers is around the 5-10% range, unless they substantially increase their presence in international markets like Japan. Instead, Coupang's main lever to drive revenue growth over the coming 3-5 years will be increasing penetration of their new products (e.g., food delivery, advertising, payments) within their existing customer base. In Q2, Coupang reported a total net revenue per active customer of $282, which increased 7% YoY on an absolute basis, but 20% in constant currency, driving the bulk of their 27% YoY revenue growth (constant currency). Increasing customer adoption and engagement across more offerings is accelerating our flywheel (CEO Bom Kim, Q2 2022 Earnings Call). Rapid gross margin expansion Coupang is a low gross margin business as a large proportion of their e-commerce sales come from first-party (1P) relationships where Coupang purchases products from a wholesale supplier, stores it in one of their warehouses, and controls distribution to the customer. While 1P sales require substantial upfront investment in infrastructure and generate lower margin revenue than third-party (3P) sales where Coupang simply acts as the marketplace intermediary connecting suppliers who ship products directly to customers, it allows Coupang to better control product quality and delivery times. Over time, Coupang expects to increase their proportion of e-commerce business coming from higher margin 3P sales: Despite 1P being a harder problem to solve, we chose to invest in 1P before 3P because we believe 1P leadership is the foundation for providing the best overall experience, including the best 3P offering in the market. By breaking the trade-offs across price, service, and selection, our superior 1P offering attracts more and more customers to make Coupang their default shopping destination. This increased traffic leads into more sales for 3P which attracts more 3P sellers, who further expand the selection on Coupang. That increases selection and convenience for customers, which in turn attracts even more customers and higher frequency, broadening the top of the funnel for both offerings (CEO Bom Kim, Q2 2021 Earnings Call). Arguably, what is more important than Coupang's absolute gross margin is the relative change in gross margin over time. Gross margin expansion, particularly from a small base, creates powerful operating leverage which can generate substantial improvements to the bottom line. As can be seen in the below figure, Coupang's gross margin hovered between 14-18% throughout 2020-2021 before rocketing higher in 2022. CPNG Gross Profit Margin (Quarterly) data by YCharts In Q2 2022, Coupang reported a gross margin of 22.9%, up from 20.4% in Q1 2022 and 18.2% in Q2 2021 (excludes the impact of the fire at one of their fulfilment centers). As a result, Coupang's gross profit in Q2 increased 41% YoY (excluding the fire) or 75% YoY (including the impact of the fire which suppressed Q2 2021 gross margin), substantially outpacing their revenue growth rates. So, what's driving Coupang's rapid gross margin expansion? Well, it wasn't price increases as Coupang kept all their pricing policies the same throughout the quarter. The answer is that Coupang has been heavily investing over the past few years in building out their logistics and fulfilment infrastructure to be able to meet increased COVID-19 demand, support their 3P sellers, and generate efficiencies with newer delivery services, like food (Coupang Eats) and grocery delivery (Rocket Fresh). These investments have been acutely suppressing gross margins, but Coupang is now in a position to be able to reap the rewards from these investments in vertical integration.
|CPNG||US Online Retail||US Market|
Return vs Industry: CPNG matched the US Online Retail industry which returned -38% over the past year.
Return vs Market: CPNG underperformed the US Market which returned -22.1% over the past year.
|CPNG Average Weekly Movement||9.4%|
|Online Retail Industry Average Movement||10.6%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.8%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: CPNG is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.
Volatility Over Time: CPNG's weekly volatility (9%) has been stable over the past year.
About the Company
|2010||68,000||Bom Suk Kim||https://www.coupang.com|
Coupang, 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.
Coupang Fundamentals Summary
|CPNG fundamental statistics|
Is CPNG overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|CPNG income statement (TTM)|
|Cost of Revenue||US$16.12b|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||-0.57|
|Net Profit Margin||-5.10%|
How did CPNG perform over the long term?See historical performance and comparison
Is CPNG undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 3/6
Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for CPNG?
Other financial metrics that can be useful for relative valuation.
|What is CPNG's n/a Ratio?|
Price to Sales Ratio vs Peers
How does CPNG's PS Ratio compare to its peers?
|CPNG PS Ratio vs Peers|
|Company||PS||Estimated Growth||Market Cap|
Price-To-Sales vs Peers: CPNG is good value based on its Price-To-Sales Ratio (1.6x) compared to the peer average (3x).
Price to Earnings Ratio vs Industry
How does CPNG's PE Ratio compare vs other companies in the US Online Retail Industry?
Price-To-Sales vs Industry: CPNG is expensive based on its Price-To-Sales Ratio (1.6x) compared to the US Online Retail industry average (0.6x)
Price to Sales Ratio vs Fair Ratio
What is CPNG's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PS Ratio||1.6x|
|Fair PS Ratio||1.3x|
Price-To-Sales vs Fair Ratio: CPNG is expensive based on its Price-To-Sales Ratio (1.6x) compared to the estimated Fair Price-To-Sales Ratio (1.3x).
Share Price vs Fair Value
What is the Fair Price of CPNG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: CPNG ($17.75) is trading below our estimate of fair value ($32.79)
Significantly Below Fair Value: CPNG is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.
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How is Coupang forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?
Future Growth Score4/6
Future Growth Score 4/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: CPNG is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.9%).
Earnings vs Market: CPNG is forecast to become profitable over the next 3 years, which is considered above average market growth.
High Growth Earnings: CPNG is expected to become profitable in the next 3 years.
Revenue vs Market: CPNG's revenue (14.4% per year) is forecast to grow faster than the US market (7.6% per year).
High Growth Revenue: CPNG's revenue (14.4% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: CPNG's Return on Equity is forecast to be low in 3 years time (10.4%).
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How has Coupang performed over the past 5 years?
Past Performance Score0/6
Past Performance Score 0/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: CPNG is currently unprofitable.
Growing Profit Margin: CPNG is currently unprofitable.
Past Earnings Growth Analysis
Earnings Trend: CPNG is unprofitable, and losses have increased over the past 5 years at a rate of 11.2% per year.
Accelerating Growth: Unable to compare CPNG's earnings growth over the past year to its 5-year average as it is currently unprofitable
Earnings vs Industry: CPNG is unprofitable, making it difficult to compare its past year earnings growth to the Online Retail industry (-41.1%).
Return on Equity
High ROE: CPNG has a negative Return on Equity (-49.02%), as it is currently unprofitable.
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How is Coupang's financial position?
Financial Health Score4/6
Financial Health Score 4/6
Short Term Liabilities
Long Term Liabilities
Stable Cash Runway
Forecast Cash Runway
Financial Position Analysis
Short Term Liabilities: CPNG's short term assets ($5.2B) exceed its short term liabilities ($4.3B).
Long Term Liabilities: CPNG's short term assets ($5.2B) exceed its long term liabilities ($2.1B).
Debt to Equity History and Analysis
Debt Level: CPNG has more cash than its total debt.
Reducing Debt: Insufficient data to determine if CPNG's debt to equity ratio has reduced over the past 5 years.
Cash Runway Analysis
For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.
Stable Cash Runway: CPNG has sufficient cash runway for more than a year based on its current free cash flow.
Forecast Cash Runway: Insufficient data to determine if CPNG has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.
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What is Coupang current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Cash Flow Coverage
Dividend Yield vs Market
|Coupang Dividend Yield vs Market|
|Market Bottom 25% (US)||1.6%|
|Market Top 25% (US)||4.6%|
|Industry Average (Online Retail)||1.1%|
|Analyst forecast in 3 Years (Coupang)||0%|
Notable Dividend: Unable to evaluate CPNG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate CPNG's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if CPNG's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if CPNG's dividend payments have been increasing.
Earnings Payout to Shareholders
Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: Unable to calculate sustainability of dividends as CPNG has not reported any payouts.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Bom Suk Kim (43 yo)
Mr. Bom Suk Kim founded Coupang Corp. in 2010 and serves as its Chief Executive Officer and Chairman of the Board. He serves as Director at Coupang Corp. since May 2010. Mr. Kim founded Coupang, Inc. and h...
CEO Compensation Analysis
|Bom Suk Kim's Compensation vs Coupang Earnings|
|Date||Total Comp.||Salary||Company Earnings|
|Jun 30 2022||n/a||n/a|
|Mar 31 2022||n/a||n/a|
|Dec 31 2021||US$2m||US$891k|
|Sep 30 2021||n/a||n/a|
|Jun 30 2021||n/a||n/a|
|Mar 31 2021||n/a||n/a|
|Dec 31 2020||US$14m||US$887k|
Compensation vs Market: Bom Suk's total compensation ($USD1.59M) is below average for companies of similar size in the US market ($USD13.05M).
Compensation vs Earnings: Bom Suk's compensation has been consistent with company performance over the past year.
Experienced Management: CPNG's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.
Experienced Board: CPNG's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: CPNG insiders have only sold shares in the past 3 months.
Recent Insider Transactions
|07 Jul 22||SellUS$1,715,704||Thuan Pham||Individual||120,209||US$16.15|
|18 May 22||BuyUS$1,002,291||Kevin M. Warsh||Individual||76,077||US$13.21|
|18 May 22||SellUS$3,285,000||Benjamin Sun||Individual||250,000||US$13.14|
|04 Apr 22||SellUS$2,277,410||Thuan Pham||Individual||119,990||US$18.98|
|17 Mar 22||BuyUS$3,770,000||Greenoaks Capital Partners LLC||Company||200,000||US$18.85|
|09 Mar 22||SellUS$1,043,500,000||SoftBank Investment Advisers (UK) Limited||Company||50,000,000||US$20.87|
|06 Jan 22||SellUS$3,356,916||Thuan Pham||Individual||121,422||US$28.17|
|01 Dec 21||BuyUS$16,574,193||Greenoaks Capital Partners LLC||Company||620,266||US$27.04|
|05 Oct 21||SellUS$3,208,352||Thuan Pham||Individual||119,923||US$26.94|
|Owner Type||Number of Shares||Ownership Percentage|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Coupang, Inc.'s employee growth, exchange listings and data sources
- Name: Coupang, Inc.
- Ticker: CPNG
- Exchange: NYSE
- Founded: 2010
- Industry: Internet and Direct Marketing Retail
- Sector: Retail
- Implied Market Cap: US$31.359b
- Shares outstanding: 1.77b
- Website: https://www.coupang.com
Number of Employees
- Coupang, Inc.
- Tower 730,570
- South Korea
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|CPNG||NYSE (New York Stock Exchange)||Yes||Class A Common Stock||US||USD||Mar 2021|
|788||DB (Deutsche Boerse AG)||Yes||Class A Common Stock||DE||EUR||Mar 2021|
|CPNG *||BMV (Bolsa Mexicana de Valores)||Yes||Class A Common Stock||MX||MXN||Mar 2021|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/28 00:00|
|End of Day Share Price||2022/09/28 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.