Leo Sun, The Motley Fool
5 min read
In This Article:
-
Coupang continues to grow as it gradually expands overseas.
-
Sea scaled back its ambitious growth plans, but its business is still wobbly.
-
The more focused e-commerce leader looks like the better investment.
Coupang (NYSE: CPNG) and Sea Limited (NYSE: SE) were both popular growth stocks during the buying frenzy in meme and growth stocks in 2021.
Coupang, which owns South Korea's largest e-commerce platform, went public at $35 on March 11, 2021. Its stock closed at its all-time high of $50.45 just four days later. Sea, which owns Southeast Asia's leading e-commerce platform Shopee and the video game publisher Garena, went public at $15 per share on Oct. 20, 2017. Its stock set its record high of $366.99 on Oct. 19, 2021.
Today, Coupang's stock trades at about $27 a share, while Sea trades at roughly $163. Both stocks retreated from their all-time highs as their growth slowed and rising interest rates compressed their valuations. Should you buy either of these stocks as a turnaround play today?
Coupang, which is based in Seattle, still generates most of its revenue in South Korea. It conquered that market by building its first-party fulfillment centers within seven miles of 70% of South Korea's population, drawing more merchants to its third-party marketplace and expanding its Prime-like Wow subscriptions with more features and digital perks.
Its number of active customers grew from 14.9 million at the end of 2020 to 23.4 million in the first quarter of 2025. Its ranks of Wow subscribers more than doubled from 6 million in 2020 to 13 million in 2023, but it hasn't updated that figure since then.
That expansion was driven by the introduction of the Coupang Play streaming media platform in 2020 and upgrades for its Rocket Delivery, Rocket Fresh grocery, and Coupang Eats food delivery services.
Coupang also launched its marketplace in Taiwan in 2022 and acquired the British online luxury marketplace Farfetch in 2024 to expand beyond South Korea. From 2020 to 2024, its revenue rose at a compound annual growth rate (CAGR) of 26%.
It also turned profitable on a generally accepted accounting principles (GAAP) basis in 2023 and 2024. The company's profits rose as it expanded its higher-margin third-party marketplace, automated more services, and sold a larger mix of Farfetch's higher-margin luxury products.
From 2024 to 2027, analysts expect Coupang's revenue and GAAP EPS to grow at a CAGR of 13% and 130%, respectively. Those are incredible growth rates for a stock that trades at just 1.4 times this year's sales. Its valuations might be compressed by the near-term concerns about tariffs and trade wars, but it could command a much higher valuation if those headwinds dissipate.
