Essential Facts About Coupang

Coupang shares fell by -2.8% during the day's evening session, and are now trading at a price of $15.36. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.

Coupang's P/B and P/E Ratios Are Higher Than Average:

Coupang, Inc., together with its subsidiaries owns and operates in e-commerce business through its mobile applications and Internet websites primarily in South Korea. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of 22.96 and an average price to book (P/B) ratio of 4.24. In contrast, Coupang has a trailing 12 month P/E ratio of 64.0 and a P/B ratio of 9.37.

When we divideCoupang's P/E ratio by its expected five-year EPS growth rate, we obtain a PEG ratio of 0.7, which indicates that the market is undervaluing the company's projected growth (a PEG ratio of 1 indicates a fairly valued company). Your analysis of the stock shouldn't end here. Rather, a good PEG ratio should alert you that it may be worthwhile to take a closer look at the stock.

Growing Revenues With Increasing Reinvestment in the Business:

2019 2020 2021 2022 2023
Revenue (MM) $6,273 $11,967 $18,406 $20,583 $23,149
Revenue Growth n/a 90.77% 53.81% 11.82% 12.47%
Gross Margins -10% -4% -8% -1% 2%
Operating Margins -10% -4% -8% 0% 2%
Net Margins -11% -4% -8% 0% 2%
Net Income (MM) -$697 -$463 -$1,543 -$92 $429
Net Interest Expense (MM) $97 $150 $45 $27 $42
Depreciation & Amort. (MM) $71 $128 $201 $231 $255
Earnings Per Share -$39.48 -$19.16 -$1.08 -$0.05 $0.24
EPS Growth n/a 51.47% 94.36% 95.37% 580.0%
Diluted Shares (MM) 19 29 1,424 1,765 1,857
Free Cash Flow (MM) -$530 -$183 -$1,084 -$259 $1,840
Capital Expenditures (MM) $218 $485 $674 $824 $783
Long Term Debt (MM) $0 $970 $520 $803 $834
LT Debt to Equity -0.0 -0.24 0.24 0.33 0.28

Coupang has growing revenues and increasing reinvestment in the business, low leverage, and positive EPS growth. However, Coupang has slimmer gross margins than its peers, consistently negative margins with a stable trend, and an unconvincing cash flow history.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.