Shares of leading South Korean e-commerce juggernaut Coupang (CPNG 1.21%) are down 6% as of 3 p.m. ET on Wednesday, according to data provided by S&P Global Market Intelligence.
Coupang soared past analysts' sales expectations and snuck past guidance for earnings per share when it announced earnings on Tuesday afternoon.
However, since the stock's share price has tripled over the last four years, the market had it priced for perfection, and it seemed Coupang's third quarter wasn't quite "perfect" enough, prompting today's downward slide.
Lofty expectations versus perfectly fine results
While the market met Coupang's earnings with a shrug, I'd argue that the company's actual operations only grew stronger during the quarter.
Sales, gross profit, and free cash flow rose 18%, 20% and 39%, highlighting not only Coupang's steady growth but also its improving margins. Better yet, this sales growth was split evenly between new customers, which grew by 10%, and higher average revenue per user, which rose by 7%.
However, the figure that has me the most excited about Coupang's long-term potential was its accelerating triple-digit sales growth rate in Taiwan, a country it recently expanded into.
Image source: Getty Images.
Highlighting why Coupang is so optimistic about its fledgling operations in Taiwan, founder and CEO Bom Kim explained, "These levels of customer adoption in Taiwan are similar to those we saw at the same stage in building our retail business in Korea, reinforcing our confidence in its long-term potential."
Though Taiwan's population is slightly less than half of South Korea's, success in a foreign market could signal that Coupang could take its e-commerce prowess elsewhere.
Coupang isn't outrageously "cheap" as a $59 billion company, but its potential in Taiwan and numerous other growth areas keep me a happy shareholder.
