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Is Coupang Stock a Buy, Sell, or Hold in 2025?
CPNGCoupang(CPNG) The Motley Fool·2025-02-08 10:52

Core Viewpoint - Coupang's stock has increased by 77% over the past year, but it remains 51% below its 2021 IPO price of 63.50,indicatingaresetofexpectationssincethen[1]CompanyOverview−CoupangisoneofAsia′slargestretailers,offeringawiderangeofproductsthroughitsonlinemarketplace,includinggroceries,electronics,andfashion[3]−ThecompanyhasacompetitiveadvantageinSouthKorea,effectivelypreventingAmazonfromgainingsignificantmarketpresence[4]RecentDevelopments−CoupanghasexpandeditsoperationsinAsia,establishinglogisticshubsinSingaporeandTaiwan,whicharekeygrowthdrivers[5]−In2024,CoupangacquiredFarfetch,aluxuryfashionmarketplace,todiversifyitsofferingsbeyondmass−marketretail[5]FinancialPerformance−ForQ32024,Coupangreporteda2763.50, indicating a reset of expectations since then [1] Company Overview - Coupang is one of Asia's largest retailers, offering a wide range of products through its online marketplace, including groceries, electronics, and fashion [3] - The company has a competitive advantage in South Korea, effectively preventing Amazon from gaining significant market presence [4] Recent Developments - Coupang has expanded its operations in Asia, establishing logistics hubs in Singapore and Taiwan, which are key growth drivers [5] - In 2024, Coupang acquired Farfetch, a luxury fashion marketplace, to diversify its offerings beyond mass-market retail [5] Financial Performance - For Q3 2024, Coupang reported a 27% year-over-year increase in net revenue, or 20% excluding Farfetch's impact, with active customers rising by 11% to 22.5 million [6] - The company's new services, such as Coupang Eats and Coupang Pay, saw a revenue growth of 146% year-over-year in Q3, excluding Farfetch's contribution [7] Future Projections - Analysts expect Coupang's revenue to grow by 24.7% in 2024 and 15.5% in 2025, with adjusted EPS projected to reach 0.49 in 2025 compared to 0.01in2024[8][9]−Revenueestimatesfor2024and2025are0.01 in 2024 [8][9] - Revenue estimates for 2024 and 2025 are 30.4 billion and $35.1 billion, respectively [9] Market Positioning - Coupang's stock is trading at a forward P/E ratio of 48 for 2025, which is higher than regional competitors like Sea Limited and Chinese companies such as Alibaba and PDD Holdings [12][13] - The premium valuation reflects its status as a U.S. incorporated company, but it raises concerns about potential risks if growth does not meet expectations [13]