Are Investors Still Underappreciating This Hypergrowth E-Commerce and Technology Stock?

Core Insights - Coupang's stock is experiencing an after-hours rise following strong fourth-quarter earnings results, contrasting with the decline in technology and AI stocks in February [1] - The company has surpassed $30 billion in annual revenue, indicating significant growth potential ahead [2] Financial Performance - For Q4 2024, Coupang reported a 21% year-over-year revenue increase to $8 billion, with growth observed on both organic and foreign currency neutral bases [3] - Gross profit grew by 48% year over year, with an adjusted gross margin of 29%, up from 25% a year ago, indicating profitable growth [4] - Despite a net income drop to $131 million due to major investments, Coupang generated $1 billion in free cash flow for the full year, showcasing a healthy financial position [5] Growth Segments - The Developing Offerings segment, which includes international e-commerce, financial technology, and food delivery, saw revenue growth exceeding 300% year over year, reaching $1.1 billion in quarterly revenue [6] - The core e-commerce marketplace in South Korea remains robust, with active customer spending increasing by 6% year over year on a foreign currency neutral basis [8] Customer Dynamics - Total active customers grew by 10% year over year to 22.8 million in Q4 2024, with new customers starting at higher spending levels, indicating potential for continued growth [8] Valuation and Future Outlook - Coupang aims for an adjusted profit margin of 10%, supported by efficient operations and strong free cash flow generation [9] - With the potential to exceed $50 billion in revenue in the coming years, the company could achieve over $5 billion in annual free cash flow at a 10% margin [10] - The current market cap of under $43 billion suggests that Coupang's stock is undervalued, especially given its growth trajectory and profitability metrics [11]