Coupang (CPNG): The 69% ”Beat” That Wasn’t — Our Call Is AVOID. Is CPNG Stock a Buy?

Coupang, Inc. (CPNG) Q2 2026 — Reported Aug 4, 2026 BEFORE the open for Q2 2026 (quarter ended June 30). Revenue $8,856M, +3.9% YoY (+10% constant currency), vs ~$9,050M expected - a 2.2% MISS. GAAP EPS $(0.32) vs ~$(0.29). Adjusted EPS $(0.09) excludes $410M of Korean fines. Operating loss $(556)M. Adjusted EBITDA $163M, -62%. CPNG closed $16.78, +2.2%. Every headline read 'Coupang beats EPS by 69%'. It didn't. The $410M PIPC fine was announced June 10 - eight weeks before the print - so consensus already carried it. Strip it out properly and the Street's underlying number was $(0.06); Coupang delivered $(0.09). That is a three-cent MISS. Revenue missed too, and Product Commerce - 84% of the company - saw adjusted EBITDA fall 42%. THE CALL: AVOID (4/5, A CHEAP MULTIPLE ON A MARGIN THAT DOESN'T EXIST YET) — base-case value ~$10.75 vs ~$16.78 today. KEY METRICS: - CALL: AVOID 4/5, fair value ~$10.75 vs $16.78 - about 36% BELOW the price. Path-to-profitability DCF: FY2030E revenue $47.0B (7%/yr) x a 3.5% operating margin = $1,645M EBIT, $1,234M after 25% tax, plus $1.00B D&A less $1.50B capex plus a $350M working-capital release = $1,084M of free cash flow; 3% terminal growth at 9.5%, PLUS $3.60B net cash, over 1,792M shares = $9.35 base. Bear $8.00, bull $15.09. Only ONE of the nine cells in our grid reaches $16.78. - THE BEAT NOBODY CHECKED: the $410M PIPC fines were announced June 10 - 20 days before the quarter closed and 8 weeks before the release - and were fully accrued in Q2. Consensus was ~$(0.29) INCLUDING them. $410M / 1,799M diluted shares = $0.2279, exactly the $0.23 per-share adjustment Coupang booked in its own reconciliation. $(0.29) less $(0.23) = an implied underlying $(0.06); Coupang delivered $(0.09). GAAP says the same: $(0.32) vs $(0.29). A three-cent MISS, not a 69% beat. - THE CORE IS STALLING: Product Commerce is 84% of the company. Revenue +1% ($7,425M), gross profit -5% ($2,268M, margin -204bp to 30.5%), and segment adjusted EBITDA $382M vs $663M - DOWN 42%, margin from 9.04% to 5.15% (-389bp). The fine is NOT in that number; segment EBITDA excludes it. Developing Offerings (Eats, Play, fintech, Taiwan, Farfetch) actually improved: revenue +20%, gross profit +32%, EBITDA loss narrowed from $(235)M to $(219)M. - REVERSE DCF: $16.78 x 1,792M = $30.1B equity, less $3.60B net cash = a $26.5B enterprise. Solve for the margin that closes the gap and you need ~$2.19B of 2030 free cash flow - about $3.1B of operating profit on $47.0B, a 6.6% OPERATING MARGIN. Coupang's operating income was $473M (2023), $436M (2024), $473M (2025) while revenue went $24.4B to $34.5B: +42% revenue, ZERO added operating profit. Best full year in four: 1.94%. Today: NEGATIVE 0.61%. - CURRENCY, CASH AND WHAT'S NEXT: $8,524M x 1.10 = $9,376M vs $8,856M actual - a $520M FX drag worth 6.1 points of growth. Revenue per customer $301 (-2%) in USD, $321 (+5%) constant currency. ~$3.60B NET CASH - but they drew $750M on the revolver while spending $850M on buybacks, with TTM free cash flow of $105M (-87%). Still to come: the July Incheon warehouse fire (~$246M, hits Q3), a criminal trial, four US class actions, and a KFTC case that could unbundle Eats from WOW. STREET: consensus Buy, ~$26 target (+55%). We DIFFER. What to watch: Changes our mind UP: Product Commerce adjusted EBITDA margin back above 7% for two straight quarters, or the won reverting far enough that reported growth catches constant currency. Confirms the bear: Commerce margin below 4.5%, another PIPC or KFTC penalty, or more buybacks funded by the revolver. Hard rule: if trailing FCF goes negative, we cut to a SELL. We would start buying under $11. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.