Coupang Q3 Preview: Fastest Growing Segment Might Be Delivered For Free

Summary:

  • I’m paying 30x forward free cash flow for Coupang, Inc.’s mature Product segment, but the Developing Offerings segment adds massive potential upside.
  • Coupang’s net cash position (9% of market cap) gives it flexibility to invest and grow, further de-risking my investment.
  • With expected EBITDA of $2.5 billion from the Product segment alone, the valuation looks reasonable, but the fast-growing Developing Offerings make it even more compelling.
  • Coupang’s Developing Offerings, currently growing close to 100% y/y, are like an undiscovered gem—adding value without impacting the price I pay today.

Coupang logo, sign on company headquarters in Silicon Valley.

Michael Vi

Investment Thesis

Coupang, Inc. (NYSE:CPNG) is a business that I’ve been bullish on for so long, but haven’t yet pulled the trigger on (this may soon change).

The bear case, from my perspective, is twofold. It’s not a US company; therefore, it’s


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.


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