Amazon vs. Coupang: Which Stock Should You Buy Now?
At the forefront of e-commerce and cloud services, Amazon (NASDAQ: AMZN) has established itself as a global powerhouse. Over its long history of innovation, the company has rewarded shareholders significantly, with its stock price more than doubling in the last five years.
On the other side of the globe, Coupang (NYSE: CPNG) is aiming to mirror Amazon’s success, emerging as a serious competitor and one of the largest online retailers in Asia. Despite a rough patch after its 2021 IPO, Coupang’s stock has rebounded impressively, gaining 70% in the past year.
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Both Amazon and Coupang are appealing options for investors, but which one is the better choice at this moment? Let’s explore the essential details to help you decide.
Image source: Getty Images.
Why Amazon Remains a Strong Choice
The stock price of Amazon has soared by 33% in the past year, a clear indication of its strong performance. The recent fourth-quarter earnings report (ending December 31, 2024) showcased a 10% year-over-year increase in net sales, while earnings per share (EPS) rose an impressive 86% to $1.86.
Supportive economic conditions are vital to this growth, promoting consistent global consumer spending. Amazon has also made significant strides in enhancing operational efficiency, resulting in sharply increased profit margins. One of the cornerstones of its success is its leading position in artificial intelligence (AI), providing critical cloud solutions and a vast range of high-demand AI and machine learning services.
Amazon’s strength lies in its diversified portfolio, tapping into both consumer demand and technology. Analysts from Yahoo! Finance project a solid 2025 for Amazon, predicting a 10% increase in revenue and a 15% rise in EPS. Investors looking for a well-established company with solid fundamentals may find Amazon increasingly attractive.
Why Coupang is a Contender
Although smaller than Amazon, Coupang still boasts a robust business, generating over $30 billion in revenue last year. The company is based in the U.S. but primarily operates in South Korea, where it holds a dominant position in e-commerce, providing a wide range of products from groceries to electronics.
Amazon’s potential in South Korea is hindered by Coupang’s strong local market understanding, which gives it a competitive edge. To further its reach, Coupang has been expanding in Asia, opening logistics hubs in Singapore and Taiwan, which present significant growth opportunities. In 2024, Coupang acquired luxury online marketplace Farfetch, demonstrating its commitment to diversification and international growth. The company is also branching into services like Coupang Eats, a food delivery app, and Coupang Pay, a financial platform.
Coupang’s strategy seems effective. Analysts are forecasting a 24% revenue growth for 2024, with projections for top-line growth of 15% in 2025. Net income is also trending positively, with EPS expected to rise to $0.50 in 2025, up from just $0.01 in 2024. The stock currently has a forward price-to-earnings (P/E) ratio of 51, compared to Amazon’s 35. However, this valuation may be justified due to Coupang’s stronger earnings trajectory and growth in emerging markets.
CPNG PE Ratio (Forward) data by YCharts.
Coupang: The Preferred Choice
Choosing between Amazon and Coupang is challenging, as both companies show great promise for delivering positive returns for shareholders. Nevertheless, if a choice must be made, Coupang appears to have an upper hand as it approaches a profitability milestone in 2025. This pivotal moment may enhance its share price and allow it to outperform Amazon.
Is Coupang Worth a $1,000 Investment Right Now?
Before buying stock in Coupang, take this into account:
The Motley Fool Stock Advisor analyst team has recently named their 10 best stocks for investors, and Coupang wasn’t included. The stocks on this list have the potential to deliver substantial returns in the upcoming years.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Dan Victor has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends Coupang. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
