The new year is just around the corner, and many investors are looking for the best stocks to fuel portfolio growth in 2025 and beyond. The annual calendar shift can inspire investors to reevaluate their holdings, looking for weeds that need mowing while seeding new positions. 2023 and 2024 are going to be great years for technology stocks thanks to the boom in artificial intelligence (AI) tools. However, with S&P 500 Index and Nasdaq Near all-time highs, the best opportunities in this category may be drying up.
So where can high-growth investors look for bargains? My answer: Cupang (NYSE: CPNG). The South Korean e-commerce platform remains undervalued and is a perfect growth stock for investors to buy and hold for the long term. Here’s why.
Coupang is South Korea's leading e-commerce platform. Have a vertically integrated delivery network Amazonthe company's ability to quickly deliver goods to customers has allowed the company to increase its share of the country's retail market. In fact, you could argue that it offers a better delivery experience than Amazon. Coupang integrates with its own food delivery network to deliver groceries within hours, with items ordered before midnight arriving by 7am the next morning. You can even return items by leaving them on your front porch.
All of these benefits are available for a monthly subscription fee of about $5.75 — an incredible value and why 22.5 million people in a country of 51.8 million are active Coupang customers. Despite currency headwinds from a stronger U.S. dollar, Coupang's revenue has more than doubled since 2021, with trailing 12-month sales reaching $28.9 billion.
Now, the company is expanding its platform into a new market: Taiwan. It replicates the strategy used in South Korea, with stunning results so far. Third-quarter revenue from Coupang's developed products segment, which includes international e-commerce sales, rose 347% year over year to $975 million. Expanding into Taiwan should help Coupang maintain its impressive growth trajectory for the rest of the decade.
While Coupang's revenue growth is impressive, it might not even be the best part of this company. That honor can arguably be attributed to its margin expansion. Coupang expects long-term adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins of at least 10%.
Its profitability has stagnated over the past few quarters, but that's due to heavy investments to launch and grow in the Taiwan market. Even so, Coupang still generated operating income of $124 million in the first nine months of 2024, a significant improvement from the $1.1 billion operating loss reported during the same period three years ago.
Today, Coupang's market capitalization reaches $40.3 billion. Compared to the trailing 12-month adjusted earnings of $0.24 per share, the stock looks expensive. However, I think investors should be forward-thinking about this stock.
Keep in mind that Coupang is still in the early stages of profitability. Meanwhile, its third-quarter revenue rose 27% year-over-year, and revenue growth has been accelerating since the beginning of 2023. Analysts expect revenue to reach $35.3 billion in 2025, and the stock has a forward price-to-sales ratio of 1.1.
It's an attractive entry point for a leader in a high-growth e-commerce market, which makes Coupang my top choice for the New Year.
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John Mackey is the former CEO of Amazon subsidiary Whole Foods Market and a board member of The Motley Fool. Brett Schafer works at Amazon and Coupang. The Motley Fool has a position and recommendations on Amazon. The Motley Fool recommends Coupang. The Motley Fool has a disclosure policy.
Once-in-a-decade opportunity: My top growth stocks to buy in 2025 Originally published by The Motley Fool