Stealing a Page From Amazon’s Playbook

Bezos would be proud [View in browser]( BROUGHT TO YOU BY: Proprietary Data Insights Financial Pros Black Friday & Cyber Monday Searches in the Last Month Rank Name Searches #1 Amazon 20,359 #2 Coupang 2,609 #3 Walmart 2,321 #4 Best Buy 670 #5 Etsy 416 #ad [3 Investment Trends for 2023 & Beyond]( Brought to you by [Trader Tax Pros]( [You Should be Paying Less to the IRS on Your Trading Gains]( Investor status vs. Trader tax status…Mark-to-Market election requirements…the list goes on. If you aren't 100% clear on these concepts, there’s a good chance that you’re keeping less of your trading and investing gains than you could be. Or, worse yet – you may be exposed to IRS audits or action. For a limited time, we’re offering a FREE trader tax considerations webinar. And, as a bonus, you’ll get a free, private 20-minute consultation to discuss your situation with our top tax advisor. [Click here for more details.]( Black Friday & Cyber Monday Stealing a Page From Amazon’s Playbook Our proprietary stock-search database, Trackstar, doesn’t just find popular penny stocks, it sees market trends as they happen. After Black Friday and Cyber Monday, every Wall Street analyst will be watching retailers and e-commerce companies. Yet last week, Trackstar already began to see search volume in related names steadily rise. While there were obvious names like Amazon (AMZN), Coupang (CPNG) stood out for one obvious reason: It’s not based in the U.S. As one of Asia’s largest e-commerce companies, it came as a bit of a shock, especially given e-commerce platform Shopify’s note highlighting heavy retail sales in the U.S. and Europe over the weekend. In fact, CPNG's search volume has exceeded retailers Walmart (WMT), Best Buy (BBY), and Etsy (ETSY), some of the more popular retailers this holiday season. The South Korean stock began trading in the U.S. only back in March 2021. Since then, it’s been a steady bleed for shares. But shares have more than doubled since their low in May of this year. So is this increased interest tied to the holidays, Q3 earnings, or something deeper? Coupang’s Business Some regard Coupang as the Amazon of South Korea. It's one of the largest e-commerce companies in Asia. It offers various services, including same-day and next-morning delivery of groceries and general merchandise, prepared foods through Coupang Eats, and video streaming through Coupang Play. Its markets include South Korea, Japan, Taiwan, Singapore, and China. Coupang has over 100 fulfillment centers, covering 42 million square feet and millions of products. [Quarters] Source: Coupang The company invested heavily in technology to improve optimization, automation, machine learning, and robotics. Those investments are starting to pay off, as the firm delivered a record net income of $91 million in Q3 2022. The company IPO’ed in March 2021 on the New York Stock Exchange, reaching a high of $69. Shares bottomed out in May 2022 at $8.98 per share. Financials [EPS] Source: Stock Analysis CPNG CEO Bom Kim announced during its Q3 2022 conference call that the company’s next milestone is to become free-cash-flow positive. Similar to Amazon, the firm invested large in CapEx in building its warehouses and beefing up inventory. Now, it's beginning to normalize its CapEx spending. Kim believes free-cash-flow margins should trend towards their adjusted EBITDA margins. One thing’s for sure, CPNG has been growing at an explosive rate. Revenues rocketed from $4 billion in 2018 to $18.4 billion in 2021. Over the last 12 months, CPNG has made $20.3 billion in revenues. The company’s financials are stable, with $2.9 billion in cash, $2.1 billion in debt, and a current ratio of 1.2x. Valuation [Valuation] Source: Seeking Alpha CPNG's profitability has improved for three straight quarters. The company has enhanced its leveraging of machine learning to predict changes in customer demand by region and optimized inventory orders and placement. CPNG reported its first quarter of GAAP net income in Q3 2022. Its P/E GAAP ratio is NM (not meaningful), which is also the case for one of its peers, ETSY. BBY has a P/E GAAP ratio of 12x, WMT is at 46.9x, and AMZN is at 83.9x. However, forward estimates put CPNG's P/E ratio at 107x, still expensive, but profitable. CPNG trades at a price-to-sales ratio of 1.7x. In comparison, AMZN trades at 1.8x, WMT at 0.7x, BBY at 0.39x, and ETSY at 6.19x. Profitability [Profit] Source: Seeking Alpha CPNG is inching closer to profitability. The firm’s EBIT margin is currently -2.9%. AMZN's is 2.5%, WMT's is 3.4%, BBY's is 4.3%, and ETSY's is 15.8%. Meanwhile, CPNG has a net income margin of -2.95%, not nearly as strong as AMZN at 2.25%, WMT at 1.49%, or BBY at 3.2%, but significantly better than ETSY at -25.9%. Coupang's gross profit margin significantly spiked in Q3, hitting a high of 24.2%. Gross profit rose substantially, 64% YoY in Q3. The company credits its success to better managing costs and optimizing its food delivery business. Growth [Financials] Source: Seeking Alpha Coupang’s growth has been incredible. Sales grew 18.6% YoY for the trailing 12-month period. To put that into context, ETSY has grown revenues 11%, BBY -8.4%, WMT 4.9%, and AMZN 9.6%. In Q3, CPNG grew revenues 27%, despite a difficult macroeconomic environment. [Understand the headlines that dominate the markets.]( At The Juice, we explain what the top stories mean and why they matter to you as a consumer and an investor. We'll help you make informed money decisions and become a smarter, more confident investor. [Sign up for free.]( Our Opinion 8/10 We have to hand it to Trackstar on this one. This isn’t a company we'd normally look at. Coupang is dominant in the Asian e-commerce market. The firm is investing heavily in technology to improve its business, and based on its latest quarterly earnings report, this appears to be working well. Shares of the stock are up nearly 20% over the last month but are still down 32.8% YTD. We believe the stock is a buy if you can get shares between $15 to $20. News & Insights Just Spilled - [After a Brutal Q3, Has This Software Stock Bottomed?]( - [Where the Big Money’s Looking]( - Can This 100-Year-Old Company Change With the Times? - Thanks to Trump, This Stock Could Soar [We want to hear from you! Let us know your thoughts by clicking here]( # [submit to reddit]( [submit to reddit]( [submit to reddit]( [submit to reddit]( To ensure delivery of all emails, [allow us on your list](. Update your email preferences or unsubscribe [here](. View our privacy policy [here](#). Copyright ©2022 InvestingChannel. All rights reserved. 1325 Avenue of the Americas, Floor 27 & 28 New York, New York 10019 Disclaimer: This is not investment advice. This InvestingChannel, Inc. newsletter is for information purposes only and opinion-based. Futures, forex, stock, and options trading are not appropriate for all investors. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can ensure returns or against losses. No representation or implication is being made that using any of these methodologies or systems will generate returns or ensure against losses. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions. [Link](