We recently published a list of Top 10 Stocks to Buy According to Durable Capital Partners. In this article, we are going to take a look at where Coupang, Inc. (NYSE:CPNG) stands against other top stocks to buy according to Durable Capital Partners.
Durable Capital Partners is a Maryland-based hedge fund management firm founded in the second quarter of 2019 by Henry Ellenbogen. The firm primarily follows a long-term equity investment strategy, with a focus on early-stage and durable growth in small- and mid-cap equities across public markets. Ellenbogen, who serves as the Managing Partner and Chief Investment Officer, leads the firm’s investment approach.
Ellenbogen established Durable Capital Partners in 2019 and currently holds the roles of Managing Partner and Chief Investment Officer. Before founding Durable, he spent nearly two decades at T. Rowe Price Associates, Inc., where he served as Vice President and Chief Investment Officer for U.S. Equity Growth. During his tenure, he led the U.S. Small-Cap Growth Equity Strategy and managed the New Horizons Fund. Additionally, he was an active member of the U.S. Equity Steering Committee and the Corporate Governance Committee for U.S. Equity.
Between 2001 and 2019, Ellenbogen spearheaded private market investments in several high-profile companies. His leadership at the New Horizons Fund contributed to its recognition with multiple industry awards. Notably, the fund received Investor’s Business Daily’s Best Mutual Funds Award in 2018 across categories such as U.S. Diversified Equity Funds, Growth Funds, and Small-Cap Funds. Additionally, it earned the Thomson Reuters Lipper Fund Award for Best Small-Cap Growth Fund over a ten-year period (2017), a five-year period (2016), and both five- and ten-year periods (2013). Prior to his investment career, Ellenbogen served as Chief of Staff for U.S. Representative Peter Deutsch and gained experience as a Summer Associate at Goldman Sachs.
Academically, he graduated magna cum laude from Harvard College with a degree in History and Science. He later earned a J.D. from Harvard Law School and an MBA from Harvard Business School, where he was recognized as a Baker Scholar. Additionally, he has taught as an adjunct professor at New York University’s Graduate School of Politics. Ellenbogen is a member of the Barron’s Roundtable and contributes to the Investment Committee of the Smithsonian Institution. He also serves as Chairman of the Board for The Posse Foundation.
According to its most recent 13F filing for the fourth quarter of 2024, Durable Capital Partners reported $12.26 billion in managed 13F securities, with its top 10 holdings accounting for 47.59% of its portfolio.
Our Methodology
The stocks discussed below were picked from Durable Capital Partners’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from over 1,000 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A woman holding a laptop, wearing a graphic t-shirt, casually checking her e-commerce order.
Coupang, Inc. (NYSE:CPNG)
Number of Hedge Fund Holders as of Q4: 87
Durable Capital Partners’ Equity Stake: $629.42 Million
Based in Seattle, Washington, Coupang, Inc. (NYSE:CPNG) generates revenue primarily through its Product Commerce segment, which includes direct retail sales and marketplace fees, and its Developing Offerings, which encompass Coupang Eats, Coupang Play, Fintech, and Farfetch.
For the fourth quarter of 2024, Coupang, Inc. (NYSE:CPNG) reported total net revenues of $8 billion, marking a 21% year-over-year increase. Excluding Farfetch, revenue growth stood at 14% while gross profit surged by 48% year-over-year to $2.5 billion, with a gross profit margin of 31.3%, reflecting a 570-basis-point improvement. The company reported a net income of $131 million, while net income attributable to Coupang stockholders stood at $156 million. Diluted earnings per share (EPS) was $0.08, but it was adjusted to $0.04. The company’s adjusted EBITDA for the quarter was $421 million, with a 5.3% margin, increasing by 80 basis points year-over-year.
Segment-wise, the Product Commerce segment generated $6.9 billion in net revenue, reflecting a 9% year-over-year increase. Active customers in this segment grew 10% year-over-year, reaching 22.8 million. Gross profit from Product Commerce rose 31% year-over-year to $2.3 billion, with a gross profit margin of 32.7%. Product Commerce adjusted EBITDA stood at $539 million, improving by $95 million year-over-year, with a margin of 7.8%. Meanwhile, the Developing Offerings segment, which includes international operations, Coupang Eats, Play, Fintech, and Farfetch, saw net revenues of $1.1 billion, reflecting a 296% year-over-year increase. The Developing Offerings segment’s adjusted EBITDA remained negative at $118 million; however, this represented a $32 million year-over-year improvement, aided by a $30 million benefit from Farfetch’s consolidation.
Coupang, Inc. (NYSE:CPNG)’s continued revenue growth, margin expansion, and increasing customer base highlight its strong market position and potential for long-term profitability, making it fourth in the list of top stocks to buy according to Durable Capital Partners. Additionally, hedge fund participation increased, as 87 of the 1,009 hedge funds tracked by Insider Monkey had stakes in Coupang, Inc. (NYSE:CPNG) by the end of Q4 2024, collectively valued at nearly $4.75 billion, up from 56 funds in the previous quarter.
Baron Fifth Avenue Growth Fund stated the following regarding Coupang, Inc. (NYSE:CPNG) in its Q4 2024 investor letter:
“Shares of Coupang, Inc. (NYSE:CPNG), Korea’s largest e-commerce platform, corrected 10.5% in the fourth quarter (even though they finished 2024 up 33.9%). While the company delivered solid quarterly results with 27% year-on-year revenue growth with Farfetch and other initiative losses narrowing significantly, its product commerce EBITDA margin missed expectations due to a temporarily elevated spending on technology and automation. Sluggish domestic consumption in Korea, with the e-commerce market experiencing flattish to negative growth, and political uncertainty stemming from President Yoon’s declaration of martial law and subsequent impeachment, further weighed on the stock. Despite these short-term challenges, we maintain a positive outlook on Coupang’s long-term market share expansion and margin growth trajectory, and view Coupang as one of the most competitively advantaged e-commerce businesses globally, with significant runway for both revenue and earnings growth.”
Overall, CPNG ranks 4th on our list of top stocks to buy according to Durable Capital Partners. While we acknowledge the potential for CPNG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CPNG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.