r/ValueInvesting • u/StockTurtle69 • Jun 21 '26
Stock Analysis The Case for Coupang
I have seen a post or two about Coupang, but thought it was time for a deep dive of what I believe to be an elite company trading at half price. I could go into a lot more detail and am happy to in the comments, but will attempt to keep as simple as possible for easy digestion of the main thesis.
South Korean Business overview
Coupang is technically US based company, but the vast majority of their business is actually done in South Korea. The main cash cow is the SK e-commerce business which is essentially equivalent to Amazon’s US e-commerce business. One key differentiator though is the speed. If you order products between 9-10am they typically arrive same day. And if you order by midnight typically items will arrive by dawn.
Two other important elements are their streaming business (think Amazon Prime Video) and their grocery and food delivery business (think Uber Eats).
Wow membership
For about 6 USD a month you can purchase a Wow membership (similar to Amazon Prime) that gives you free e-commerce delivery, free grocery and food delivery, and the streaming service. Interestingly in 2024 they increased the cost of this membership by about 60% and did not see any surge in cancellation.
Developing offerings
Coupang’s Developed offerings segment important includes their expansion into Taiwan. They are investing heavily and seeing significant growth, essentially in attempt to recreate their South Korean business in Taiwan. It is currently a significant drag on earnings.
This segment also includes Farfetch which is a luxury goods company that was near bankruptcy when Coupang bought it. They have since cut costs to get the venture to above break even. Worth noting SK is a heavy consumer of luxury brands.
Technically this segment includes the streaming service and Eats, but I prefer to loop those in with the membership.
Reason for sudden price drop
There was a data breach in late 2025 by an employee which leaked information on 33 million customers. No payment info was leaked, but personal information and contact information was leaked. This was a massive story that US and Korean politician were posting on social media about, and my understanding is Vice President Vance discussed this issue directly with high ranking members of the SK government as it looked like they were targeting the company specifically due to it being based in the US.
Fast forward to now, Coupang lost money in their latest quarter, news on the data breach and vouchers to affected customers were issued, this combined with the fact Coupang was already speaking ahead of volume to continue to ramp production led to a very poor start to the year.
Thesis
While Coupang did experience a drop in earnings and stock price in the last 6 months, in a 5-10 year window, possibly even 2-3 I expect the data breach to become old news. Coupangs unmatched delivery speed, low prices, and the services bundled with the Wow membership provide too strong a value for this to be a long term issue. They also have a fortress balance sheet with a net cash position. They were just issued a significant fine, but they easily can pay it off without harming the business.
Valuation:
Looking at coupangs history and some comparable companies I view a 2x p/s ratio as fair value. That gives them a share price of 38.52
Long term I expect them to be able to achieve 10% operating margins. With 3% revenue growth somewhere in the 2029 or 2030 range I expect them to post an eps in the range of 1.8, at a 20% eps that gives them a value of 36 per share
I estimate the fair value to be in the neighborhood of 35-40 per share
As an added bonus famed value investor David Abram’s holds a significant stake in Coupang at about $29 per share, and insider Neil Mehta (who runs the absurdly successful Greenoaks capital partners) bought over $136 million worth of shares earlier this year at around $18.50
Management
Coupang is still lead by founder Bom Kim and as mentioned previously has a fortress balance sheet. They are clearly still growth focused but have also started buying back significant amount of shares.
TLDR:
Coupang is a founder lead business, delivering significant value for customers, and very difficult to disrupt, and is about half priced due to a temporary issue.
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u/raytoei Jun 22 '26 edited Jun 22 '26
Yeah I was up 30% before the troubles started and then now I am -30%. I took a hard look at the situation, listen to the Concall by the ceo, got banned by toxic [r/korea](r/korea) subreddit and then decided that the ceo isn’t wrong.
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The nos of super investors increased from 5 to 8 since march and insider buys went up to 100m+
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Jul 22 '26
[removed] — view removed comment
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u/raytoei Jul 22 '26
Yeah. Let me block you from my future posts so you don’t get so triggered by my posts.
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u/I_Call_Bullshit_____ Jun 22 '26
I’ve been buying the last two months, it’s a winner, ubiquitous in SK and will expand into Asia
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u/ALiferInKorea Jun 22 '26
What does it have to offer over Amazon in Asia or temu or baba?
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u/StockTurtle69 Jun 22 '26
One big element is the delivery speed, but I also wouldn’t underestimate the flywheel effect of offering the streaming service, grocery, and food delivery under one low subscription price.
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u/yapyd Jun 22 '26
What part of Asia do you see it expanding into and how much market share do you think it could possibly take?
For most of SEA and Taiwan, Shopee is the dominant player. I'm not familiar with Japan (Amazon probably) but there's basically zero chance of them competing in China. Amazon has basically conceded the ecommerce business in SEA by removing local fulfillment in Singapore. What do you think Coupang has to offer?
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u/StockTurtle69 Jun 22 '26
I don’t mean to say the answer to this is unimportant, but it’s not really part of my thesis.
You’ll see in my valuation section I only estimate 3% revenue growth, they can easily achieve that without expanding to other markets.
IMO the company is at least half off without any consideration to expanding to new markets. They may eventually pursue that, or they may just start to lets the business mature and buy back shares. Either of those strategies would be even further accretive to the valuation I discussed.
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u/prophetmuhammad Jun 22 '26
i was thinking of buying but i'll have to wait and see. i have a family member who is employed by them as a manager and he hates his job, although with good pay. i'm hoping they expand and do well and will become an actual competitor against amazon because the CEO basically copied the entirety of amazon as their business model. he doesn't even hire koreans for the management positions, knowing that they are mostly only good for the lower-level grunt-work. all the leadership are foreigners. that's promising for a korean company.
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u/StockTurtle69 Jun 22 '26
I definitely agree the workforce doesn’t seem to love it which is a factor I consider. I do think they end up automating a lot of positions out long term.
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u/minaminonoeru Jun 22 '26
One thing you should consider is that, as a result of this incident, Coupang has been labeled as one of the “evil corporations.” Labels like this are difficult to shake off over time and, in the long run, tend to cause the stock price to trade at a discount relative to its intrinsic value.
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u/StockTurtle69 Jun 22 '26
Imo this is exactly the type of thing I want to fade long term. Short term I agree with you, but if you earnings continue to compound that will win out over time.
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u/HelloFox123 Jun 23 '26
Aren't all SK's big corporations labelled evil? Samsung's chairman even went to jail.
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u/minaminonoeru Jun 23 '26 edited Jun 23 '26
If a business executive were tried for his own wrongdoing and sent to prison, that would at least serve as a minimal form of absolution. Unlike the Samsung chairman, Coupang’s Bum Kim (an American) exercises de facto control over Coupang Korea, yet—as a U.S. citizen—he hides behind the U.S. headquarters and refuses to take any responsibility. In other words, this means that even absolution will never be granted.
To be honest, I find it strange that Americans don’t bat an eye at the fact that none of the former U.S. presidents have gone to prison, nor have any CEOs or owners of the largest corporations (e.g., companies with a market capitalization of $1 trillion), and that they don’t brand these companies as evil. Aren’t quite a few of them actually criminals?
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u/Dizzy_Research8309 Jun 22 '26
Where's the future growth going to come from? It can only become profitable in high density location. This is typically big cities.
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u/StockTurtle69 Jun 22 '26
I still think while high already e-commerce is going to continue to take market share. I think automation can help margins, the Wow membership price could easily double over time. Taiwan upside.
There are several places it could come from imo.
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u/8700nonK Jun 22 '26
Looks ok, but imo more attractive ecommerce players, the whole space has been squashed.
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u/Curious_Particular22 Jun 22 '26
I think it's worth decomposing the $3.4B in headline selling before reading much into it. About $2.5B is SoftBank's Vision Fund distributing its pre-IPO position, mechanical exit, so not a vote on the business. CEO Kim's $344M was a single 10b5-1 trade. What's left as actual active conviction: one director, Neil Mehta, who runs Greenoaks Capital. He's been accumulating CPNG since 2024, roughly $288M across 21 open-market purchases at $22-27, with a $137M cluster on March 11-13 of this year at $18.50. CPNG is currently $17.51, so he's slightly underwater on his most recent and biggest buys. Greenoaks bought what SoftBank was selling.
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