Pre-earnings brief
Reports
Fri, Nov 11, 2022
Est. EPS
—
Est. revenue
—
Implied move
±4.0%
EPS beat rate
88%
—
Est. EPS
—
Est. Rev
—
Impl. Move
±5.4%
Coupang, Inc. is a leading e-commerce platform in South Korea, known for its fast delivery services and wide range of products. As a major player in the consumer discretionary sector, it benefits from trends in online shopping and consumer spending, especially as more people turn to digital platforms for their shopping needs.
Last quarter
In the last quarter, Coupang reported an EPS of -$0.09, significantly beating analyst expectations of -$0.26. The stock reacted positively, gaining 2.19% the following day.
Management promises and guidance
EPS beat streak
4Q
EPS beat rate
88%
Avg EPS surprise
+181.85%
Avg 1-day reaction
+1.34%
Overall, expectations are mixed as investors are hopeful for continued improvement in EPS and revenue growth, but cautious about rising competition.
Bull case
If Coupang can demonstrate strong revenue growth and a path to profitability, it could significantly boost investor sentiment and stock price.
Bear case
On the other hand, if the company fails to meet revenue expectations or shows signs of slowing customer growth, it could lead to a negative reaction from the market.
Key metrics to watch
Revenue Growth
Expected to show growth compared to last year.Investors will be looking for signs of continued growth in revenue as e-commerce competition intensifies.
Earnings Per Share (EPS)
Expected to be around -$0.09.EPS is a key indicator of profitability, and a positive surprise could boost investor confidence.
The print will turn on these.
Q1
What is the expected revenue growth rate for this quarter?
Revenue growth is critical for assessing the company's ability to compete in the e-commerce space and attract new customers.
Q2
How many new active customers has Coupang acquired this quarter?
Customer growth is essential for long-term sustainability and profitability, and investors will closely watch this metric.
Why consensus could be wrong
The Street may underestimate Coupang's ability to sustain customer growth despite increasing competition, as its unique logistics model gives it an edge.
Supporting evidence
Coupang's recent investments in technology and customer service could lead to improved retention rates.
Historical performance shows that Coupang has consistently beaten EPS expectations, indicating underlying strength.
The options market is pricing a significant move, suggesting that traders anticipate a more substantial reaction than the historical average.
Key risk
If customer acquisition numbers exceed expectations, it could shift the narrative significantly.
Pre-commit to what would confirm each case.
The market is debating whether Coupang can maintain its growth trajectory in a competitive e-commerce environment.
Bull confirmed if
Revenue growth of over 20% year-over-year would confirm the bullish case.
Bear confirmed if
A revenue decline or stagnation would support the bearish outlook.
What the market is pricing for the move.
Implied Move
±4.0%
Historical Avg
±1.8%
The options market is pricing in a move of about 4%, indicating that traders expect significant volatility around the earnings report.
Options are pricing ±4.0% while CPNG has averaged ±1.8% over the last 8 prints — setup is pricing rich.
ATM IV
0.6%
30d HV
29.1%
Likely market behavior by outcome. Not investment advice.
Beat & raise
If Coupang beats expectations, history suggests a potential stock increase of around 1.41%, confirming a positive outlook.
In line / cautious
If results are in line but management provides cautious commentary, the stock may react neutrally or slightly down.
Miss
A miss could lead to a decline, with history suggesting a drop of about 0.91% on average.
The lines on the call that would change the story.
Customer Growth
Expected to show an increase compared to previous quarters.An increase in active customers is crucial for long-term growth and market share.