Why Coupang Stock Jumped Today

Shares of leading South Korean e-commerce retailer Coupang (NYSE: CPNG) have risen by 7% as of 4 p.m. EDT on Thursday, according to data provided by S&P Global Market Intelligence .

Growing its active customers, sales, and gross profits by 12%, 25%, and 41% during the second quarter of 2024, Coupang continued its lengthy run of above-average growth and steady margin improvements. While the market initially reacted negatively to the company's results as it slightly missed analysts' sales expectations, Coupang shares have risen over 10% across the last two days.

Coupang keeps firing on all cylinders

Making Coupang's revenue growth of 25% even more impressive is that it would have been 32% if not for an accounting change made by management last year. While the company may not be a "hypergrowth" stock like it once was, this 32% growth is rather promising, especially considering it only has $27 billion in sales versus a South Korean retail market worth $560 billion.

Adding further excitement to the company's quarterly earnings call was that free cash flow (FCF) over the trailing 12 months grew to $1.5 billion, compared to $1.1 billion last year. This FCF growth occurred despite Coupang's ongoing integration with luxury platform Farfetch, which it purchased for $500 million in early 2024 as the latter was battling indebtedness and heavy losses.

Perhaps the most exciting growth story from the earnings report was the 150% year-over-year growth in the number of sellers joining the company's Fulfillment and Logistics by Coupang (FLC) network. This rapid growth seems to be a testament to the broader ecosystem Coupang provides to its sellers and highlights the value of its offerings.

Trading at 27 times FCF , Coupang still looks attractive , especially with management as optimistic as ever about expanding into Taiwan.

Josh Kohn-Lindquist has positions in Coupang. The Motley Fool has positions in and recommends Coupang. The Motley Fool has a disclosure policy .