Coupang (NYSE:CPNG) Posts Quarterly Earnings Results, Misses Estimates By $0.09 EPS

Coupang (NYSE:CPNG) released 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. The business had revenue of $9.96 billion for the quarter, compared to analysts’ expectations of $9.76 billion. Coupang had a negative net margin of 3.77% and a negative return on equity of 20.09%. Coupang’s revenue for the quarter was up 7.5% on a year-over-year basis. During the same quarter in the previous year, the business posted $0.05 earnings per share.

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 Down 4.4%

Shares of NYSE:CPNG traded down $0.76 during trading on Thursday, reaching $16.29. 25,338,264 shares of the stock traded hands, compared to its average volume of 21,215,127. The stock has a 50-day moving average of $14.74 and a two-hundred day moving average of $17.19. Coupang has a 52-week low of $13.35 and a 52-week high of $30.09. The company has a debt-to-equity ratio of 0.21, a quick ratio of 0.68 and a current ratio of 0.87. The stock has a market cap of $29.29 billion, a P/E ratio of -21.37 and a beta of 1.15.

Insider Activity at Coupang

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

Analyst Ratings Changes

A number of research analysts have issued reports on CPNG shares. Citigroup upgraded Coupang from a “neutral” rating to a “buy” rating and set a $19.00 price objective for the company in a research note on Wednesday. Mizuho set a $21.00 target price on Coupang in a research note on Wednesday. The Goldman Sachs Group set a $31.00 target price on Coupang in a research note on Thursday, July 9th. Sanford C. Bernstein reduced their price target on Coupang from $12.00 to $11.00 and set an “underperform” rating for the company in a report on Thursday. Finally, Barclays lifted their price target on Coupang from $29.00 to $32.00 and gave the stock an “overweight” rating in a research report on Thursday. Six equities research analysts have rated the stock with a Buy rating, two have given a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Hold” and a consensus price target of $23.41.

Key Stories Impacting Coupang

Here are the key news stories impacting Coupang this week:

• Positive Sentiment: Optimistic analyst calls: Barclays raised its price target to $32 and maintained an “overweight” rating; Citigroup also upgraded Coupang to “buy,” with a $19 target. Barclays price target Citi upgrade
• Positive Sentiment: Growth outlook: Coupang forecast Q4 constant-currency revenue growth of 13%–14% and adjusted EBITDA margin expansion of 50–150 basis points. Taiwan WOW membership also grew more than 100% year over year, while consolidated constant-currency revenue increased 11% in Q3. Q4 outlook Q3 growth and membership
• Negative Sentiment: Quarterly loss missed expectations: Q3 loss was $0.18 per share, versus analysts’ expected loss of $0.09, and compared with a $0.05 per-share profit a year earlier. The loss came despite revenue of $9.96 billion beating estimates of $9.76 billion and rising 7.5% year over year. Q3 results
• Negative Sentiment: Bearish analyst view: Sanford C. Bernstein cut its price target from $12 to $11 and kept an “underperform” rating, contrasting with the recent upgrades. Bernstein ratings

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.