The South Korean online retailer Coupang (CPNG) surged over 81% on it’s NYSE debut this Wednesday, temporarily valuing the company at over $100 Billion. With an IPO valuation of $60 Billion, it marks the biggest IPO since Alibaba in 2014.
The e-commerce giant has experienced tremendous success in domestic markets since its founding in 2010. With a revenue growth rate of 91% in 2020, it grew considerably faster than frequently used comps Alibaba (BABA) and Amazon (AMZN).
Despite a seemingly lofty valuation, Coupang’s Price-to-Sales ratio of 3.6 is similar to that of Amazon and is considerably lower than Alibaba’s. Unlike these more established players, the sixth largest online retailer worldwide still operates at a loss, but the margins are narrowing. It also lacks the cloud computing segment which has been a growth engine for Amazon and Alibaba.
Will Coupang be able to continue its success story? South Korean strategist Daniel Yoo says yes and predicts a possible 30+% growth rate over the next few years. Bill Ackman has also identified potential in the business model, as he invested as early as 2014 in Coupang.