Is Coupang Stock a Buy? The Motley Fool

I recently bought a small position in Coupang, since I believe it still has room to grow in its home market and its stock looks cheap relative to its growth. According to the issued ratings of 4 analysts in the last year, the consensus rating for Coupang stock is Moderate Buy based on the current 2 hold ratings and 2 buy ratings for CPNG. The average twelve-month price prediction for Coupang is $21.07 with a high price target of $25.00 and a low price target of $17.00.

A last-minute $500 million bridge loan from the $21 billion South Ko… According to 6 analysts, the average rating for CPNG stock is “Buy.” The 12-month stock price forecast is $21.5, which is an increase of 22.37% from the latest price. I follow countless companies and select for you the most attractive investments. I do all the work of picking the most attractive stocks. Altogether, I estimate that looking ahead to the next twelve months, Coupang’s core segment could grow its EBITDA by 45% y/y, down from the 67% y/y run-rate it delivered in Q4. This shows that its nascent businesses, termed Developing Offerings, actually increased their losses by a significant amount.

  1. Michael Wiggins De Oliveira is an inflection investor.
  2. My Marketplace highlights a portfolio of undervalued investment opportunities – stocks with rapid growth potential, driven by top quality management, while these stocks are cheaply valued.
  3. Analysts like Coupang more than other Retail/Wholesale companies.
  4. Coupang, a South Korea-headquartered e-commerce company, said it will accelerate its investment in Taiwan after four straight quarters of profits.

And this is detracting from Coupang’s overall profitability. The wider one shows that Coupang’s core, Product Commerce, segment saw its underlying profitability increase by nearly 2% points y/y from approximately 5.1% to 7.1%. This led to its underlying profitability, increasing its EBITDA by 67% y/y. The ongoing investments in developing offerings, particularly in Taiwan, contribute to incremental losses in adjusted EBITDA (we’ll soon discuss further). Anyone who follows my work will know that I put a lot of focus on the customer adoption curve. And for Coupang to still be increasing its active customers to 21 million, goes to the heart of the bear case that long ago argued that Coupang had already saturated its market penetration in South Korea.

Coupang has reported strong financial results for the third quarter of 2023. The company’s net revenues reached $6.2 billion, with a year-over-year growth of 21% on a reported basis and 18% on an FX-n… Farfetch Holdings, the online luxury marketplace and technology platform, reached the precipice of insolvency in the third quarter.

About CPNG Stock

But excluding the fire’s impact, Coupang’s gross profit would have increased 86% year over year, while its gross margin would have expanded to 18.2%. Coupang’s sales growth looks healthy, but its second-quarter net loss more than tripled year over year from $159.9 million to $518.6 million. Its net loss of $0.30 per share missed estimates by $0.16.

Farfetch Rushes To Finalize Sale To Coupang

The core business is growing very profitably, but its investments into other nascent segment is viewed by Wall Street as little more than a distraction. And if something were to come out of these investments, it would be a free option on the stock. While it’s still early to assess the full impact, this acquisition positions Coupang to potentially transform the customer experience in the luxury fashion segment. Farfetch, with its $4 billion https://www.topforexnews.org/investing/7-smart-ways-to-invest-1-000-3/ GMV, brings a new dimension to Coupang’s portfolio, offering the potential to capture a significant share of the untapped luxury e-commerce market. The integration of Farfetch aligns with Coupang’s commitment to providing diverse, high-quality offerings and could open avenues for substantial value creation. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer.

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Coupang, Inc., together with its subsidiaries owns and operates retail business through its mobile applications and Internet websites primarily in South Korea. The company operates through Product Commerce and Developing Offerings segments. It also performs operations and support services in the United States, South Korea, Taiwan, Singapore, China, Japan, and India. Coupang, Inc. was incorporated in 2010 and is headquartered in Seattle, Washington.

Investors who think Coupang’s aggressive expansion plans will pay off should consider buying some shares as it dips below its IPO price. However, they should brace for a lot of near-term volatility as the bears question its ability to continue expanding domestically and overseas. Second, Coupang continued to ramp up its investments in Rocket Fresh and Coupang Eats, which contributed significantly to an 84% jump in operating expenses during the quarter. That ugly loss can be attributed to two main challenges. First, a warehouse fire caused $158 million in inventory write-offs and $295.5 million in net losses.

In conclusion, as I assess Coupang’s recent Q results, I’m drawn towards its low valuation of 14x forward EBITDA for its core business. There’s a lot to like about Coupang’s recent progress in underlying profitability. Moreover, the competitive landscape is intensifying, with increased interest in cross-border e-commerce platforms, particularly from Chinese competitors. This heightened competition poses potential risks to user attrition and basket sizes.

It’s not just Coupang’s fleet of drivers stepping on the gas. After seven consecutive quarters of decelerating revenue growth, Coupang’s top line has been accelerating for three straight reports. Use these time-tested investing strategies to grow the monthly retirement income that your stock portfolio generates. With a focus on tech and “the Great Energy Transition (including uranium)”, Michael runs a concentrated portfolio with approximately 15 to 20 stocks and an average holding period of 18 months. My Marketplace highlights a portfolio of undervalued investment opportunities – stocks with rapid growth potential, driven by top quality management, while these stocks are cheaply valued.

This matches its latest quarter’s gain, but Wall Street pros have aimed low before. Just three months ago they were targeting a 16% top-line growth spurt. U.K.-based Farfetch FTCH Holdings is to be acquired by South Korean Coupang Inc. in a deal that will give Farfetch access to $500 million of emergency capital.

Its third-quarter profit fell shy of expectations, as aggressively expanding in Taiwan weighed on its bottom line. It’s true that Coupang is showing some impressive gains early in Taiwan, but investors have seen this before. Coupang got off to a hot start in Japan, but in 7 smart ways to invest $1000 less than two years it was withdrawing from the expansion market. Coupang, a South Korea-headquartered e-commerce company, said it will accelerate its investment in Taiwan after four straight quarters of profits. Coupang was the most downloaded app in the second qua…

Recent Analyst Ratings and Stock Forecasts

The South Korean e-commerce leader will report its fourth-quarter results after Tuesday’s market close. The stock is essentially where it was in mid-December, when it https://www.day-trading.info/bond-market-mayhem-lives-on-in-these-10-charts/ announced the controversial acquisition of Farfetch. It wrapped up the $500 million deal for the assets of the online luxury apparel retailer by the end of January.

Coupang will always be viewed as a foreign business. So, even though the business is optically extremely profitable, it won’t ever trade at a US-like multiple. There’s no need to try to attempt to justify it otherwise, this is a simple fact. And investors will go from risk-seeking to risk-averse without a moment’s notice.

As investors have continued to embrace a risk-off sentiment, anything that is not the magnificent 7 mega caps appears not to be rewarded with any positive traction. You have already added five stocks to your watchlist. Upgrade to MarketBeat All Access to add more stocks to your watchlist.

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