Coupang Gears Up to Post Q1 Earnings: What's in Store for the Stock?

Coupang CPNG is scheduled to report its first-quarter 2025 results on May 6. 

See the Zacks Earnings Calendar to stay ahead of market-making news.

The Zacks Consensus Estimate for CPNG’s first-quarter 2025 revenues is currently pegged at $8.07 billion, indicating a 13.43% increase from the year-ago quarter’s reported figure.

The consensus mark for earnings has moved south by a penny to 6 cents per share in the past 30 days. The estimate implies 20% growth year over year.

CPNG surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed once, with an average surprise of 320.83%.

Let us see how things are shaping up for the upcoming announcement.

Coupang, Inc. Price, Consensus and EPS Surprise

Coupang, Inc. price-consensus-eps-surprise-chart | Coupang, Inc. Quote

Factors to Consider

As Coupang approaches its first-quarter 2025 earnings announcement, investors should carefully weigh several factors before making new investments in the South Korean e-commerce giant. The company delivered solid performance in fourth-quarter 2024, with net revenues growing 21% year over year to $8.0 billion and gross profit increasing an impressive 48% to $2.5 billion. However, certain headwinds and uncertainties may impact the upcoming quarter's results.

The weakening Korean won, which hit its lowest levels in over 10 years during the fourth quarter, is expected to continue creating currency headwinds. Management indicated in their previous earnings call that they anticipate first-quarter 2025 constant currency growth of approximately 20%, in line with fourth-quarter 2024's growth rate, excluding Farfetch. While this signals reasonable organic growth, the foreign exchange impact could dampen reported dollar-denominated results.

Macroeconomic conditions in South Korea warrant attention, as government and third-party data suggested a slowdown in domestic e-commerce market growth during the fourth quarter. Though Coupang has consistently outperformed the broader market, any continued deceleration could impact growth in the near term.

The company's increasing investment in technology and infrastructure remains both an opportunity and a challenge. While these investments support long-term innovation in AI, automation, and service enhancements, they've contributed to elevated OG&A expenses that management expects to moderate only in the "near to medium term," suggesting continued pressure on margins.

Investors should closely monitor Coupang's Developing Offerings segment, where management projected significant adjusted EBITDA losses of $650-750 million for 2025. This segment includes international expansion efforts like Taiwan, which showed promising 23% quarter-over-quarter growth in the fourth quarter, and Farfetch, which has made substantial operational improvements but remains a work in progress.

One positive factor is the company's growing Fulfillment & Logistics by Coupang offering, which management indicated is margin-accretive despite its revenue-compressing effect (as revenues are reported on a net basis). The strong performance of this high-margin business, along with automation improvements, should help support overall profitability.

Given these mixed factors and the stock's current valuation, investors may be better served holding existing positions rather than initiating new ones ahead of first-quarter results.

What Our Model Says for CPNG

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

CPNG currently has an Earnings ESP of -9.09% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

StoneCo STNE has an Earnings ESP of +13.79% and sports a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

StoneCo shares have appreciated 76.4% year to date. STNE is set to report its first-quarter 2025 results on May 8.

Affirm AFRM presently has an Earnings ESP of +63.27% and flaunts a Zacks Rank #1. 

Affirm shares have plunged 17.1% year to date. AFRM is scheduled to report its fourth-quarter fiscal 2025 results on May 8.

Baidu BIDU currently has an Earnings ESP of +8.67% and a Zacks Rank #3.

Baidu shares are up 5.9% year to date. BIDU is slated to report its first-quarter 2025 results on May 21.

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This article originally published on Zacks Investment Research (zacks.com).

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