Coupang's stock rallies on stronger-than-expected profit and revenue

By Steve Gelsi

Softbank-backed E-commerce company's stock up by 9% after it reports a 23% revenue jump.

Coupang Inc.'s stock was up by 9.1% in premarket trading on Wednesday after the Seattle-based e-commerce operator of online grocer Rocket Fresh beat analyst estimates for profit and revenue.

After the closing bell on Tuesday, Coupang (CPNG) said its fourth-quarter net income moved up sharply to $1.03 billion, or 57 cents a share, from $102 million, or 6 cents a share, in the year-ago period.

The latest period included a non-cash tax benefit of $895 million from changes in tax-related reserves.

Coupang's adjusted earnings of 8 cents a share beat the FactSet consensus estimate of 6 cents a share.

Fourth-quarter revenue rose by 23% to $6.56 billion, ahead of the analyst estimate of $6.4 billion.

"While we are pleased with the progress we made this quarter, we see even greater opportunity in front of us, as we represent just a single digit share of the vast retail spend in Korea, and even smaller in Taiwan," said Gaurav Anand, the company's financial chief, in a statement.

While Coupang is based in the U.S. it operates as an e-commerce platform in South Korea. It's been backed by Softbank Group Corp. (JP:9984) since 2015.

Mizuho USA Securities analyst James Lee on Wednesday reiterated a neutral rating on Coupang and said the company "reported a good quarter with strong top-line growth and a convincing" beat of about 20% over Wall Street estimates for earnings before interest, taxes, depreciation and amortization.

Lee said the stock is already valued at a premium and it faces headwinds from struggles of its investor Softbank, but he remains "incrementally positive about the company's category-leading position."

Prior to Wednesday's moves, the stock has risen 4.3% in 2024, compared to a 6.8% rise by the Nasdaq COMP.

-Steve Gelsi

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02-28-24 0812ET

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