Is this 'under the radar stock' going to take off in 2023?

                   December 31st, 2022, written by Crazy Miser

Key points:

Analysis

Coupang is the top growing e-commerce company in South Korea with shares approximately trading at $15.00 as of late December. The e-commerce giant turned their first profit after their 3rd quarter earnings of approximately $91 million. They have grown their market share from 7.5% in 2017 to 20% as of 2022 and are growing. Management gave a forward-looking statement; they believe they will continue to remain profitable and generate more revenue in future quarters. Total active customer grew 7% and net revenue per active customer grew 19% year over year, and net revenue quarter over quarter reached 7%. Therefore, their customer base is growing and they are getting more customers who spend more money with them each quarter and year. Management believes this performance will continue in the long term.

Notable Holders

Famous investors, Bill Gates and Stanley Druckenmiller, are high conviction believers in Coupang. Famous investors, Bill Gates and Stanley Druckenmiller, are high conviction believers in Coupang. Gates started a position in the stock Q1 of 2021 with approximately $282 million and 5.7 million shares. As of his 13F filing this past quarter, he has added nearly 62% more shares to his position leaving him with roughly 9.25 million shares. Although, Druckenmiller didn't buy more shares of Coupang this past quarter, he bought periodically throughout the bear market of 2022, amassing a large position in Coupang with 19.5 million shares and 18.4% of his Q3 portfolio. As of Q3, other prominent investors were Massachusetts Institute of Technology (MIT), Baillie Gifford & Co, Morgan Stanley, and Softbank.

Valuation

CPNG fundamentals by TradingView

We believe Coupang is drastically undervalued at it's current growth rate and anticipated future growth compared to other e-commerce companies like Shopify, Sea Limited, Etsy, and Amazon. Based on Coupang's price-to-sales ratio of 1.15 compared to the rest of the e-commerce companies with an average of 4.63, we believe the stock should be trading with a price-to-sales ratio between 4 to 5 with a price target of $40-65 per share based on current evaluation.

Technical Analysis

Webull.com - Coupang Chart Webull Desktop 

Although technical analysis isn't full proof. It can give us some predictions about where we believe the stock is headed a few weeks to months out. Based off of the 50 & 200 day moving average, the stock has performed the "golden cross" and broken out of the year long down-trending channel which is usually another bullish indicator for the long term. However, the stock has fallen below and the trend line has broke. In the short-term the price may fall further but, we believe it is time to start dollar cost averaging into this stock over the next few weeks because it is due for a retest towards the moving averages. Also, the RSI has indicated the stock has been oversold which has historically been the time to buy for this company.