Investment Case Updated: August 7, 2025
Price: $27.81 (8/7/25)
Market Capitalization: $50.7B
Enterprise Value: $48.5B
What the Company Does
Dubbed the “Amazon” of Korea, Coupang is the leading e-commerce retail and logistics provider in the country. The company has over 100 fulfillment centers in Korea, with 70% of the nation living under 7 miles from a Coupang fulfillment center, enabling rapid delivery. In addition to selling owned inventory, Coupang sells advertising and goods from third-party merchants. It also provides restaurant ordering and delivery service through its Eats segment, while Coupang Play is a content-streaming service.
Why We Own It
Coupang is the dominant and leading player in a large addressable market with numerous growth levers at a compelling price. The company still holds a single-digit market share of Korea’s commerce market, which management expects to meaningfully exceed $500B in the future, providing a long runway for growth, as evidenced by FY25 guidance that calls for constant-currency revenue growth of 20%. Active customers on the company’s platform have nearly doubled between 2019 and 2024 to 22.8MM, while newer customer cohorts not only shop at higher initial levels of spend per customer than older cohorts but also increase their spending levels at a faster rate than older cohorts over their ensuing years of shopping on the platform. The company’s Developed Offerings segment (includes Eats, Taiwan operations, Farfetch) represents an investment portfolio with compelling upside optionality, as segment revenues have grown from <$100MM in 2020 to ~$3.6B in 2024 (~21% of revenue). Management still sees a long runway for growth in both its Eats and Taiwan operations due to low market penetration rates, as its Taiwan business grew revenues by more than 100% year-over-year in 2Q25, and management expects 3Q25 growth to be even higher. Further scaling of the company’s logistics business, which continues to grow several times faster than the overall business, and its higher-margin third-party marketplace business, along with further AI automation and technology advancements should enable Adjusted EBITDA margins to expand from a company-record 4.5% in FY24 towards management’s long-term target of 10% or more.
Although shares trade at 19.7x next year’s EBITDA estimates, a premium to its ecommerce peers’ (AMZN, MELI, BABA, ETSY, EBAY, SE, JD, Naver) median multiple of ~11.3x, we believe this is justified given CPNG’s superior growth profile, as analysts are forecasting CPNG to grow EBITDA at a 34.9% CAGR from 2024-2027, more than double the peer group median’s expected growth. CPNG trades at a forward (FY26 consensus) EV/Sales multiple of 1.2x, a 52% discount to the peer group median multiple, and near a level that historically marked a bottom for Amazon.
How Management Allocates Capital
Management follows a disciplined capital allocation approach, opting to invest only when they have conviction that the potential opportunities can reach meaningful scale with moat-like returns. The top priority remains investing in organic growth and gaining market share by delivering moments of “wow” for customers, especially in Taiwan as management is becoming increasingly confident in the long-term revenue and margin expansion potential in the region. CPNG has a low-risk balance sheet with cash exceeding debt by ~$2.2B, which, along with ramping free cash flow, should provide ample funding for the company’s reinvestment needs as well as flexibility for opportunistic M&A and tapping into its $1B share buyback program (~2% of market cap).