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It’s the new year, and many investors are looking for the best stocks to fuel their portfolio growth in 2025 and beyond. The annual turn of the calendar can inspire investors to reassess their holdings, looking for weeds to cut as they consider new positions. 2023 and 2024 were phenomenal years for tech stocks due to the rise of artificial intelligence (AI) tools. However, with the S&P 500 i Nasdaq near record highs, the best opportunities may be drying up in this category.
So where can hypergrowth investors turn for bargains? My answer: Coupang (NYSE: CPNG). The South Korean e-commerce platform remains undervalued and is a perfect growth stock for investors to buy and hold for the long term. Here’s why.
Coupang is the leading e-commerce platform in South Korea. With a vertically integrated delivery network similar to Amazonthe company is able to deliver items quickly to customers, and this has seen the company continuously gain share in the country’s retail market. In fact, you could argue that it offers a better delivery experience than Amazon. Coupang integrates with its own food delivery network, delivering groceries within hours and delivering items at 7am the next day when ordered before midnight. You can even return items by simply leaving them on your front porch.
All these benefits can be obtained by paying a subscription of about $5.75 per month, an incredible value and why 22.5 million people are active customers of Coupang in a country with a population of 51.8 million. Despite currency headwinds from the strength of the US dollar, Coupang’s revenue has more than doubled since 2021, generating $28.9 billion in sales over the past 12 months.
Now, the company is expanding its platform to a new market: Taiwan. He has replicated the playbook used in South Korea with amazing results so far. Coupang’s developing deals segment, which includes international e-commerce sales, grew revenue 347% year over year in the third quarter to $975 million. The expansion into Taiwan should help Coupang maintain its impressive growth trajectory for the rest of this decade.
While Coupang’s revenue growth is impressive, it might not even be the best part of this company. Undoubtedly, that honor goes to the expansion of its margin. Coupang is targeting at least 10% adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margins over the long term.
In recent quarters, its profitability has stagnated, but this is due to heavy investments made to launch and grow the Taiwanese market. Still, Coupang generated operating income of $124 million in the first nine months of 2024, a big improvement from the $1.1 billion operating loss it posted in the same period three years ago.
