E-commerce shock and awe: Shopify and Coupang slide on earnings; Amazon stands tall

The e-commerce sector traded weak on Wednesday after some investor favorites reported earnings.

Coupang (NYSE:CPNG) fell after investors digested the Q1 earnings report that was posted late on Tuesday. The South Korean e-commerce player reported revenue was up 23% year-over-year on a reported basis for Q4 and 28% higher on a FX-neutral basis. Adjusted EBITDA was up 17% year-over-year to $281M; however, Coupang (CPNG) missed the consensus EPS estimate by a penny. Bank of America said the Q1 results look solid, showcasing Coupang’s (CPNG) competitiveness in its core operations. The firm continue to be convinced that a robust top line and improved profitability would lead to outsized returns. Potential catalysts seen for Coupang (CPNG) include a more detailed strategy on the Farfetch business and a faster turnaround in developing offerings businesses (examples: Taiwan, Eats).

Shopify (NYSE:SHOP) peeled off 19.05% after the Canadian company’s latest quarterly results were overshadowed by a GAAP loss and expectations for margin contraction. “While the spinoff of the logistics business has provided substantial margin relief over the past year, outsized growth of the lower-margin payments business is resulting in short-term margin compression, a major concern for a company that came into earnings with one of the weakest gross margin profile among any company in its valuation range,” warned Third Bridge analyst Charlie Miner. However, plenty of upside for the e-commerce platform giant is seen. “Shopify’s upmarket push is reaching new heights as new enterprise logo wins continue to pile up. Our experts have cautioned against discounting Shopify’s ability to massively change competitive landscape dynamics very quickly at the enterprise level,” he highlighted.

Meanwhile, Beyond (BYON) fell for a second straight day and is now down more than 27% since reporting earnings. Earlier in the day, Needham downgraded the stock to a Hold rating from Buy due to limited earnings visibility in today’s choppy macro backdrop and with BYON’s brands still in the early innings of various initiatives.

Other online retailers on the move included Global-E Online (GLBE) -7.35%, ZKH Groip (ZKH) -7.26%, Rent the Runway (RENT) -6.14%, Wayfair (W) -3.15%, and Etsy (ETSY) -2.45%. Sector heavyweight Amazon (AMZN) was barely fazed by the sector earnings drama. Shares of AMZN dipped 0.65%, but are still close to their all-time high. Morgan Stanley thinks Amazon (AMZN) stands out in the sector because it has the most levers to pull to boost profit and free cash flow to higher levels. “AMZN remains our Top Pick and we continue to be encouraged by the multi-year, efficiency-based cash flow story ahead,” updated analyst Brian Nowak. Meanwhile, Seeking Alpha analyst Oliver Rodzianko thinks Amazin could be a dominant leader in AI infrastructure alongside Nvidia (NVDA).