Shares of leading South Korean e-commerce retailer Coupang (CPNG 3.75%) have risen by 7% as of 4 p.m. EDT on Thursday, according to data provided by S&P Global Market Intelligence.
Growing its active customers, sales, and gross profits by 12%, 25%, and 41% during the second quarter of 2024, Coupang continued its lengthy run of above-average growth and steady margin improvements. While the market initially reacted negatively to the company's results as it slightly missed analysts' sales expectations, Coupang shares have risen over 10% across the last two days.
NYSE: CPNG
Key Data Points
Coupang keeps firing on all cylinders
Making Coupang's revenue growth of 25% even more impressive is that it would have been 32% if not for an accounting change made by management last year. While the company may not be a "hypergrowth" stock like it once was, this 32% growth is rather promising, especially considering it only has $27 billion in sales versus a South Korean retail market worth $560 billion.
Adding further excitement to the company's quarterly earnings call was that free cash flow (FCF) over the trailing 12 months grew to $1.5 billion, compared to $1.1 billion last year. This FCF growth occurred despite Coupang's ongoing integration with luxury platform Farfetch, which it purchased for $500 million in early 2024 as the latter was battling indebtedness and heavy losses.
Perhaps the most exciting growth story from the earnings report was the 150% year-over-year growth in the number of sellers joining the company's Fulfillment and Logistics by Coupang (FLC) network. This rapid growth seems to be a testament to the broader ecosystem Coupang provides to its sellers and highlights the value of its offerings.
Trading at 27 times FCF, Coupang still looks attractive, especially with management as optimistic as ever about expanding into Taiwan.
