CPNG – Market expectations are for Uniform ROA to inflect positively, but management may have concerns about capacity, margins, and demand
- Coupang (CPNG) currently trades at a substantial premium to Uniform assets, with a 12.0x Uniform P/B (V/A’).
- At these levels, markets are pricing in expectations for Uniform ROA to inflect positively to 39%, accompanied by 12% Uniform asset growth.
- However, analysts expect Uniform ROA to maintain negative levels through 2023, accompanied by 27% Uniform asset growth.
- If sustained going forward, these levels would imply a significant equity downside for the firm. That said, as an early-stage growth name, it is not uncommon to see expectations for a material positive inflection in profitability.
- Moreover, the firm’s most recent earnings call suggests management may have concerns about capacity, margins, and demand.