Coupang (CPNG 0.59%) stock, which had been trading above $25 in mid-February, sank to less than $20 in early April amid the market's negative reaction to President Donald Trump's tariffs. However, as of this writing, it sits at $28.45, a level it hadn't seen since the end of 2021.

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?

The stock market has whipsawed back and forth to start 2025, and no one knows how the markets will perform the rest of the year. But history is clear: If you regularly buy shares of growing businesses, you're going to see those investments multiply into much larger sums down the road.

Finding stocks with enormous growth potential that are trading at reasonable valuations is one way to access potentially monster gains in the stock market. Promising consumer brands like RH (RH -1.13%), Cava Group (CAVA -1.11%), and e-commerce specialist Coupang (CPNG 0.71%) are trading at prices that Wall Street analysts see as attractive buying opportunities for investors.

Coupang (CPNG 1.09%) and Sea Limited (SE 0.44%) were both popular growth stocks during the buying frenzy in meme and growth stocks in 2021.

I subscribe to the notion that investors are best off giving new initial public offerings (IPOs) at least a year to trade on the public markets before investing in them.

In this review of Coupang, we will consider the nature of the business, and, in doing so, better understand its cash flow durability, which is important in understanding its valuation. We will then consider the business' recent performance and growth runway, long-term margin expansion opportunity, and perform a valuation exercise. In my view, the market continues to wholesale reject the possibility of margin expansion, new product launches, new geographies, and new acquisitions. As such, I believe Coupang is undervalued today, and, over time, the market will come to appreciate the substantial economic content latent within the Coupang business.

Coupang's fulfillment-led strategy ensures unmatched speed, reliability, and consistency, creating a powerful moat in Korea's e-commerce market. The Wow membership flywheel, integrating Rocket Delivery, Coupang Eats, and Coupang Play, drives customer retention and spend, enhancing Coupang's ecosystem. Growth opportunities lie in expanding rural coverage in Korea, expanding spend per customer and international markets like Taiwan,.

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?

Coupang's strong customer service and extensive distribution network have driven its market leadership in Korean e-commerce, despite low profitability. Margins are expected to rise from 3% to 7% by 2027, potentially increasing EPS by 4x and driving share prices higher. Consensus forecasts predict over 30% annual earnings growth through 2027, with significant free cash flow and potential for share buybacks.