Coupang Sees Stock Surge to $28.45 Amid Market Expansion

Coupang (NYSE: CPNG), which traded above $25 in mid-February, dropped below $20 in early April due to market reactions to President Donald Trump’s tariffs. Currently, the stock is valued at $28.45, marking a return to levels not seen since late 2021.

The South Korea-based e-commerce company continues to grow its market share domestically while expanding into new markets. With a market cap surpassing $51 billion, Coupang still has significant growth potential into 2025 and beyond.

Strong Growth in South Korea

In South Korea, Coupang has over 20 million customer accounts, catering to a population of 52 million. The company’s successful e-commerce model boasts exceptional shipping capabilities, including same-day delivery and overnight service.

Orders can be easily returned using Coupang’s reusable packages. The company’s grocery and food delivery services offer free shipping, outperforming competitors like Amazon. This is all available through a monthly subscription to its Rocket Wow program, which also provides a streaming video service.

Coupang has leveraged scale and automation to maintain positive cash flow, generating $1 billion in free cash flow from $31 billion in revenue over the past year. Revenue grew by 21% year-over-year on a currency-neutral basis, with gross profit increasing 31% in the last quarter.

Expansion into Taiwan

The company recently launched its e-commerce model in Taiwan, achieving significant initial success. This segment reported a 78% revenue increase year-over-year, reaching $1 billion on a currency-neutral basis.

Although the Taiwan segment is currently unprofitable, the market’s characteristics are similar to South Korea’s. Management believes this new venture can leverage profits from South Korea to scale operations in Taiwan.

This international expansion adds substantial potential to Coupang’s addressable market, with Taiwan being only its second international venture.

Future Revenue Potential

Coupang’s future appears promising. Domestic sales in South Korea are expected to continue growing, while Taiwan presents opportunities for explosive growth. Additionally, a strengthening Korean won against the U.S. dollar enhances the value of Coupang’s revenue for American investors.

Following the acquisition of the Farfetch luxury shopping platform out of bankruptcy, Coupang aims to cater to the local market that heavily invests in fashion and luxury items.

Optimistically, Coupang could reach $50 billion in revenue, eventually scaling to $100 billion by the decade’s end. Management projects a profit margin of around 10%, which could yield $10 billion annually. A market cap of approximately $200 billion could be realized if this profit is achieved, translating to a price-to-earnings ratio of about 20.

Currently valued at just over $50 billion, this suggests the stock could increase by over 300% in the next five years. Thus, Coupang represents a favorable prospect for long-term investors, even after its recent stock rebound.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.