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Coupang (CPNG +5%) soars to multi-year highs today following a double upgrade from Bernstein to "Outperform" from "Underperform." Today's upgrade follows four additional upgrades from other brokerages in 2024.

Briefing.com notes that the South Korean-focused e-commerce giant, similar in several ways to Amazon (AMZN), has embarked on an explosive rebound this year following an extended correction from highs reached shortly after going public in 2021. CPNG is up over +60% on the year, kicked into gear by a few impressive quarterly reports. After a sharp pullback following CPNG's latest Q2 report coming up just shy of analyst revenue expectations, shares bounced back stronger than before as investors focused on the several uplifting trends from the quarter.

• One highlight from Q2 was another quarter of steady double-digit growth in active customers within CPNG's Product Commerce segment, its primary segment, comprising 97% of FY23 revs. While newer customers tend to spend less than established users, a rising number of new active customers adds more cement to CPNG's foundation for longer-term revenue generation.
• Another bright spot was CPNG's 13th consecutive quarter of marketplace growth outpacing overall business growth. This means that marketplace, or third-party, sellers are outpacing first-party sales and the overall South Korean retail market. Most of these sellers are small and medium-sized businesses (SMBs), which can be more sensitive to the macroeconomic environment. However, despite some uneven regional demand characteristics, SMBs are performing nicely, an encouraging trend leading into the back half of FY24.
• CPNG's Developing Offerings segment, a minor component of its total business, is enjoying promising momentum. Various businesses comprise Developing Offerings, including Eats, similar to DoorDash (DASH), which saw a nearly 30% jump in volumes yr/yr in Q2. Farfetch, another piece of Developing Offerings and a recent acquisition, is on track to generate close to positive adjusted EBITDA on a run-rate basis by the end of 2024.

CPNG may not be operating in an environment as favorable as it was during the pandemic. However, after a lengthy period of headwinds as economic conditions normalized during 2022 and 2023, CPNG's adjustments throughout these years are bearing meaningful fruit. While the company has not yet become consistently profitable, it is showing notable margin improvements, exiting Q2 with gross margins of 28.3% when excluding Farfetch, a 220 bp jump yr/yr. CPNG anticipates further margin expansion over the next several quarters. At the same time, the company has been registering accelerating top-line growth. With new customers steadily flocking to CPNG's platform and economic conditions gradually improving, the company is staring at significant upside potential. Management estimates the current commerce market in South Korea at $560 bln and sees it as highly fragmented, ripe for CPNG to disrupt.