By Senad Karaahmetovic
Shares of Coupang (NYSE:CPNG) trade modestly lower in pre-open Wednesday after the Asian e-commerce business reported mixed Q4 results.
The stock initially fell about 3% in after-hours Tuesday trading before Deutsche Bank upgraded CPNG to Buy and helped shares pare some losses.
The company reported a profit per share of $0.06 on revenue of $5.33 billion, which compares to the consensus for earnings of $0.05 per share on sales of $5.37B. Sales rose nearly 5% while the number of active customers rose to 18.12 million. The company reported a gross profit margin of 24%.
"The results this quarter and the continued progress you see are a reflection of years of investment and innovation by our teams to attack the biggest trade-offs for customers," said Bom Kim, Founder and CEO of Coupang.
On the guidance front, the company sees long-term adjusted EBITDA of 10% or higher.
Deutsche Bank analysts upgraded to Buy from Neutral with a price target of $20 per share
"Coupang has stepped ahead of the competition again in 2022. 4Q, for example, was a weak period for online, with market growth of 7.5% - and the majority of that growth coming from travel, yet Coupang was able to grow at 21%, with growth across categories… The macro backdrop is not as strong as it was, but we think Coupang's profit growth story will get investor attention given its strong franchise," the analysts said in the upgrade note.
Mizuho analysts praised the company for increased efficiency and discipline, which drove the EBITDA upside. Still, the analysts remain Neutral-rated "due to valuation and competitive concerns, but incrementally positive about the company's margin expansion near-term due to improved efficiency and share gains."