Coupang (NYSE:CPNG) Announces Quarterly Earnings Results

Key Points

• Coupang reported quarterly revenue of $9.96 billion, above the $9.76 billion consensus estimate, but EPS of -$0.18 missed the cited consensus loss of $0.09.
• Revenue grew 11% year over year in constant currency, and management forecast 13%–14% growth in Q4, with a sequential improvement in adjusted EBITDA margin.
• Profitability and cash flow remained under pressure: adjusted EBITDA was $116 million, free cash flow over the trailing 12 months was negative $409 million, and a fulfillment-center fire added about $248 million in expenses.

Coupang (NYSE:CPNG - Get Free Report) announced its earnings results on Tuesday. The company reported ($0.18) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.09) by ($0.09), FiscalAI reports. Coupang had a negative net margin of 2.16% and a negative return on equity of 8.77%. The company had revenue of $9.96 billion for the quarter, compared to the consensus estimate of $9.76 billion.

Here are the key takeaways from Coupang's conference call:

• Q3 consolidated revenue grew 11% year over year in constant currency, ahead of guidance, while Product Commerce grew 8% (about 9% adjusted for the Chuseok holiday shift) and Developing Offerings grew 27%. Coupang said WOW membership in Korea reached a record high, with Rocket Fresh volumes growing more than twice as fast as Product Commerce overall.
• Management expects continued recovery, guiding to 13%–14% consolidated constant-currency revenue growth in Q4 and a 50–150 basis-point sequential improvement in adjusted EBITDA margin. It reiterated that Product Commerce margins should return to approximately pre-data-incident levels by mid-next year, while noting the pace may vary by quarter.
• Profitability and cash flow remained pressured: Q3 adjusted EBITDA was $116 million, trailing-12-month free cash flow was negative $409 million, and Product Commerce adjusted EBITDA margin was 4.6%, down about 420 basis points year over year. A fulfillment-center fire added approximately $248 million of expenses, and the company also cited recovery marketing, supply-chain pressures, and fixed-cost deleverage.
• Coupang raised the top end of its full-year Developing Offerings loss outlook by $50 million–$100 million, primarily to accelerate Taiwan infrastructure and supply-chain investments ahead of demand. Management pointed to strong customer adoption and long-term cash-flow potential, but the added investment is expected to increase near-term losses.

Coupang Stock Up 4.0%

Shares of CPNG stock traded up $0.58 during trading hours on Tuesday, reaching $15.28. 26,616,189 shares of the company's stock were exchanged, compared to its average volume of 21,140,416. The stock's 50 day moving average is $14.76 and its 200-day moving average is $17.24. The company has a market cap of $27.47 billion, a price-to-earnings ratio of -35.54 and a beta of 1.17. The company has a current ratio of 0.87, a quick ratio of 0.68 and a debt-to-equity ratio of 0.21. Coupang has a fifty-two week low of $13.35 and a fifty-two week high of $32.14.

Wall Street Analysts Forecast Growth

CPNG has been the subject of a number of analyst reports. Weiss Ratings restated a "sell (d)" rating on shares of Coupang in a research note on Monday. Bank of America dropped their price objective on Coupang from $27.00 to $24.00 and set a "buy" rating on the stock in a research report on Wednesday, August 5th. Deutsche Bank Aktiengesellschaft upgraded Coupang from a "hold" rating to a "buy" rating and cut their target price for the company from $23.00 to $21.50 in a research note on Wednesday, August 5th. Barclays reiterated an "overweight" rating and issued a $29.00 target price on shares of Coupang in a report on Tuesday, July 7th. Finally, The Goldman Sachs Group set a $31.00 price target on shares of Coupang in a research report on Thursday, July 9th. Five research analysts have rated the stock with a Buy rating, four have given a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat.com, the stock currently has a consensus rating of "Hold" and an average target price of $24.06.

Insiders Place Their Bets

In other news, insider Harold Rogers sold 192,110 shares of the firm's stock in a transaction on Monday, August 10th. The stock was sold at an average price of $16.18, for a total value of $3,108,339.80. Following the completion of the sale, the insider owned 740,931 shares of the company's stock, valued at $11,988,263.58. This trade represents a 20.59% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. Also, CAO Jonathan D. Lee sold 5,519 shares of the business's stock in a transaction on Friday, October 2nd. The stock was sold at an average price of $13.65, for a total value of $75,334.35. Following the transaction, the chief accounting officer owned 176,396 shares in the company, valued at approximately $2,407,805.40. This trade represents a 3.03% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 203,148 shares of company stock valued at $3,272,530 in the last three months. Insiders own 12.83% of the company's stock.

Coupang News Roundup

Here are the key news stories impacting Coupang this week:

• Positive Sentiment: Q3 revenue was $9.96 billion, above FactSet’s $9.76 billion estimate. One Zacks report also said Coupang’s adjusted loss of $0.18 per share was narrower than its cited $0.23 consensus loss. Revenue report Zacks earnings report
• Neutral Sentiment: Coupang said it is investing in growth initiatives. Those investments may support longer-term expansion, but the reports provide no detail here on their expected returns or timing. Article on growth investments
• Negative Sentiment: Coupang posted an adjusted loss of $0.18 per share, compared with a profit of $0.05 a year earlier. Analyst comparisons differ: MarketBeat cited a $0.09 expected loss, making the result a miss, while Zacks cited a $0.23 expected loss, making it a beat. A separate report characterized a $248 million fire-related impact as wiping out the quarter, adding a potential drag on profitability. Loss report Fire impact article

Coupang Company Profile

Coupang, Inc is an e-commerce and technology company that operates a large digital retail platform. The company offers a broad selection of merchandise, including electronics, household goods, apparel, beauty products and groceries. Its services include Rocket Delivery, a fast-delivery program; Rocket Fresh, which focuses on fresh food and groceries; and Wow, a membership program that provides delivery and other customer benefits.

Coupang also operates Coupang Eats, a restaurant-ordering and delivery service, as well as Coupang Play, a digital video streaming platform.

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