Loss-Making Coupang, Inc. (NYSE:CPNG) Expected To Breakeven In The Medium-Term

Coupang, Inc. (NYSE:CPNG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Coupang, Inc. owns and operates in e-commerce business through its mobile applications and Internet websites primarily in South Korea. With the latest financial year loss of US$568m and a trailing-twelve-month loss of US$1.2b, the US$41b market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Coupang will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Coupang

Consensus from 12 of the American Online Retail analysts is that Coupang is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$378m in 2024. Therefore, the company is expected to breakeven roughly 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 64%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Coupang's upcoming projects, but, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 28% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Coupang which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Coupang, take a look at Coupang's company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:

1. Valuation: What is Coupang worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Coupang is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Coupang’s board and the CEO’s background.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.