Why Coupang stock went up today

Shares of South Korea’s leading e-commerce retailer Coupang (CPNG 7.40%) were up 7% as of 4 p.m. EDT Thursday, according to data from S&P Global Market Intelligence.

Growing active customers, sales and gross profit by 12%, 25% and 41% during the second quarter of 2024, Coupang continued its long run of above-average growth and steady margin improvements. While the market initially reacted negatively to the company’s results, as it slightly missed sell-side analysts’ expectations, Coupang shares have risen more than 10% in the past two days.

Coupang continues to fire on all cylinders

Even more impressive is Coupang’s 25% revenue growth, which would have been 32% if not for an accounting change made by management last year. While the company may not be the “hyper-growth” stock it once was, this 32% growth is quite promising, especially considering that it only has $27 billion in sales versus a market of South Korean retail worth 560 billion dollars.

Adding excitement to the company’s quarterly earnings call was the fact that free cash flow (FCF) for the trailing 12 months rose to $1.5 billion, compared to $1.1 billion last year. This increase in FCF came despite Coupang’s continued integration with luxury platform Farfetch, which it acquired for $500 million in early 2024, as the latter struggled with heavy debt and losses.

Perhaps the most exciting growth story in the earnings report was the 150% year-over-year increase in the number of sellers joining the company’s Logistics and Fulfillment and Logistics by Coupang (FLC) network. This rapid growth seems to be a testament to the wider ecosystem that Coupang offers its sellers and highlights the value of its offerings.

Coupang, trading at 27 times FCF, still looks attractive, especially with management as bullish as ever on expanding into Taiwan.