How’d you like to get a second chance to buy Amazon (NASDAQ:AMZN) at a rock-bottom price? Sorry, but that’s not likely to happen — but you can do something similar with South Korean e-commerce company Coupang (NYSE:CPNG) as CPNG stock is still affordable.
Basically, you could have the opportunity to participate in the growth of the “Korean Amazon.” After all, the e-commerce explosion is an international phenomenon.
Not only that, but the stock is under the radar to most American traders. I spend a lot of time on financial message boards, and I haven’t heard much buzz about Coupang lately.
I always enjoy finding hidden gems like this and sharing them with the public. So, if you’re willing to expand your geographic horizons, you might profit from an underappreciated online-retail powerhouse in the making.
Analyzing the CPNG Stock Price
Here’s something you probably didn’t know: when Coupang filed for its initial public offering (IPO) on Feb. 12, it was the biggest U.S. IPO of the year at that time.
It’s interesting how so many people missed out on this major market event. You’d think that Coupang would be the hottest name on Wall Street, but the IPO was followed by a great big yawn.
There was a quick burst of initial excitement, though. As it turned out, Coupang stock shot up on its first day of public trading on March 11, closing at $49.65.
That’s roughly 40% higher than the stock’s IPO price of $35.
The rally lasted a little bit longer, with CPNG stock opening at $52.54 on March 12. However, the enthusiasm waned during the ensuing weeks.
By May 7, the stock had declined to $38.93 at close. I suppose you could say that the momentum has stalled out. Or, you could see this situation as an opportunity to own the shares at a more favorable price point. Just maybe, in a few months’ or years’ time, you’ll be glad you made the investment.
The Analysts Weigh in
Not very long ago, a group of analysts issued their opinions on Coupang and its stock. It seems that the price targets are all over the map:
- J.P. Morgan: “neutral” rating, $48 price target
- Goldman Sachs: “buy” rating, $62 price target
- Mizuho: “neutral” rating, $50 price target
- Deutsche Bank: “hold” rating, $46 price target
There’s no consensus here in terms of the price targets, which makes it more difficult for investors to make a decision.
Here’s something that might offer some guidance. While J.P. Morgan’s rating on CPNG stock was just “neutral,” analyst Stanley Yang sounded more like a bull than a bystander.
“Coupang has strengthened its leading e-commerce position in Korea driven by superior user experience on unrivaled logistics infrastructure,” Yang stated.
A High-Growth Market
Moreover, Yang backed up his stance with an impressive statistic. “The management execution has been impressive during the pandemic, driving its domestic e-commerce GMV [gross merchandise value] share to 14% in 2020 versus 7% in 2018,” he reported.
That’s a huge improvement — and importantly, Coupang is operating in a market with strong growth potential.
Research and Markets forecasts that the South Korean e-commerce will reach $325.12 billion in 2025. Furthermore, from 2021 to 2025, that market is expected to progress at a compound annual growth rate (CAGR) of 19.92%.
Yang seemingly is preparing for Coupang to play a major role in the Korean e-commerce explosion. He contends that Coupang can grow its GMV at a 31% compounded rate through the year 2025.
Additionally, Yang expects that in South Korea, Coupang will increase its market share to 28% of domestic e-commerce and 14% of the nation’s overall retail market.
The Bottom Line
Has the market completely abandoned Coupang? It feels that way, but this shouldn’t be a problem for investors seeking a hidden gem.
For all we know, Coupang could be the next Amazon in the making.
To participate, you just need an open mind and the willingness to take a chance on a company that’s underappreciated today, but could be a market darling soon.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
View more information: https://investorplace.com/2021/05/set-your-sights-on-korean-e-commerce-with-cpng-stock/