Coupang stock rallied in Wednesday trading after the tech company reported fourth-quarter earnings that beat estimates. Sales, however, came in lower than forecast. Also, an analyst upgraded Coupang to a buy call.
The Seattle-based Coupang operates the largest e-commerce platform in South Korea, along with other businesses. The company said late Tuesday that it earned 8 cents per share on sales of $7.97 billion for the December-ended quarter. Analysts polled by FactSet projected the Seattle-based company would post earnings of 1 cent per share on sales of $8.14 billion. Sales increased 21% year over year.
Founded in 2010, the Softbank-backed Coupang invested heavily to develop same-day e-commerce delivery in South Korea. Its offerings also include payments technology, food delivery and a streaming entertainment service. Coupang acquired U.K.-based global luxury goods marketplace Farfetch in January 2024.
Total customers for Coupang grew 10% to 22.8 million for the December quarter, while revenue from its e-commerce business rose 9% to $6.9 billion. Coupang's adjusted EBITDA — earnings before interest, taxes, depreciation and amortization — increased 43% year over year to $421 million. Analysts were projecting $368 million.
On the stock market today, Coupang stock is up more than 5% at 25.49 in recent afternoon trading.
Coupang Stock Breaks Out
Coupang was the IBD Stock Of The Day for Tuesday. With Wednesday's high of 25.80, shares broke out above a cup-with-handle chart pattern with a 25.67 entry, according to MarketSurge.
Mizuho analyst James Lee reiterated a neutral call for Coupang stock following the report but raised his price target to 27 from 25. He said Coupang is gaining share in Korea while expanding international investments.
"Results were mostly constructive, with EBITDA beating consensus due to operating leverage in core commerce and narrowing losses for developing offerings," Lee wrote. "Furthermore, management expects top-line growth of roughly 20% year-over-year (neutral of foreign exchange), 1 point better than consensus considering FX headwinds."
Meanwhile, Morningstar analyst Chelsey Tam wrote Wednesday that Coupang shares were undervalued based on a fair value estimate of 29.10.
"Our new forecasts reflect the better-than-expected 2024 results and 2025 guidance," Tam wrote. "We also have higher confidence in Coupang's long-term margin expansion through increasing scale and automation, and narrowing the loss margin in developing offerings."
Meanwhile, analysts at Deutsche Bank reportedly upgraded Coupang stock to a buy call from a previous neutral hold rating.
"The Korean e-commerce market had a tough year, with most traditional rivals contracting, yet much of the reason has been Coupang's superior execution, which drove 4Q net underlying revenues up 21% in local currency terms," Deutsche Bank analyst Peter Milliken wrote, as quoted by CNBC. "The company is confident for more of the same in 2025, guiding to 20% revenue growth in constant currency terms."
Coupang Up 17% This Year
With Wednesday's gains, Coupang stock has gained 17% so far this year and 56% in the past 12 months.
Coming into the report, Coupang stock had an IBD Composite Rating of 88 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Coupang's IBD Relative Strength Rating was 84 out of 99. The RS Rating means that Coupang has outperformed 84% of all stocks in IBD's database over the past year.
