Coupang beats Q3 estimates, but investors react with surprise drop

Coupang Inc., South Korea’s leading e-commerce platform, reported third-quarter earnings that exceeded Wall Street’s projections. Despite this, the company’s stock experienced a decline in after-hours trading on Tuesday.

Q3 Financial Performance

For the quarter ending September 30, 2024, Coupang reported earnings of $0.04 per share, surpassing analysts’ consensus estimate of $0.01 per share. Revenue reached $7.9 billion, a 27% increase from the $6.2 billion reported in the same period last year. This growth reflects Coupang’s expanding market presence and its ability to attract a growing customer base.

Stock Market Reaction

Despite the positive earnings report, Coupang’s stock declined by over 5% in after-hours trading, settling at $25.48. This drop followed a 4.7% gain during regular trading hours, highlighting investor concerns over certain financial metrics.

Adjusted EBITDA and Farfetch Integration

Coupang’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at $343 million, slightly below the anticipated $349 million. The company’s integration of Farfetch, a global luxury fashion platform acquired earlier this year, is nearing break-even ahead of schedule. Excluding Farfetch’s impact, earnings would have been $0.06 per share.

Analyst Insights

Financial analysts suggest that the stock’s decline may be attributed to the adjusted EBITDA falling short of expectations and potential concerns over the integration costs associated with Farfetch. However, the accelerated path to profitability for Farfetch is viewed as a positive indicator for Coupang’s long-term growth strategy.

Future Outlook

Coupang continues to invest in expanding its logistics network and enhancing customer experience. The company’s focus on operational efficiency and strategic acquisitions positions it well for sustained growth in the competitive e-commerce landscape.