Coupang, Inc.

CPNG Details

Coupang, Inc. (NYSE: CPNG) is a Korean company that specializes in offering e-commerce services. Home goods and decor, fashion and beauty products, fresh food and grocery, sporting goods, electronics, restaurant order and delivery, travel and everyday consumables, and other items and services are among the company's core offerings. CPNG runs an e-commerce and logistics system and provides delivery services. Furthermore, the company sells online advertising space on its websites and mobile applications. CPNG was listed on NYSE on March 11, 2021, at an issue price of USD 35.00 per share.

Q3FY21 Results:

• Increase in Topline: CPNG reported YoY growth of 48.09% in total revenue to USD 4.64 billion in Q3FY21 (ended September 30, 2021) from USD 14 billion in Q3FY20, due to a 42.77% YoY increase in revenue from the Net retail sales segment.
• Expansion of Losses: Net loss (attributable to common shareholders) for Q3FY21 was USD 323.98 million vs. USD 173.00 million in Q3FY20.
• Strong Balance Sheet: As of September 30, 2021, the company had cash & cash equivalents of USD 3.93 billion and total debt of USD 723.27 million.

Key Risks:

• Dependence on Coupang Pay: CPNG relies significantly on Coupang Pay to handle payments throughout its business, which must follow a complex set of laws, rules, and regulations, notably in online and mobile payment services. As a result, any decline in its quality, usability, convenience, or attractiveness could harm the company's operations.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

CPNG Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

CPNG's stock price has declined 47.05% in the past nine months and is currently leaning towards the lower end of its 52-week range of USD 22.88 to USD 65.00. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 38.21. We have valued the stock using the EV/Sales multiple-based relative valuation methodology and arrived at a target price of USD 31.41.

Considering the significant correction in the stock price in the past nine months, healthy balance sheet, current valuation, and associated risks, we recommend a "Buy" rating on the stock at the current price of USD 24.94, up 3.40% as of January 11, 2022, 12:21 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

* Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

Vontier Corporation

VNT Details

Vontier Corporation (NYSE: VNT) is a global industrial technology business specializing in global transportation infrastructure. It provides retail and commercial fueling operators, commercial vehicle repair businesses, and municipalities with a wide range of mobility technologies, diagnostics, and repair solutions, including advanced environmental sensors, fueling equipment, field payment hardware, remote management, vehicle tracking and fleet management software-as-a-service solutions, and other allied products and services. As of January 11, 2022, the company's market capitalization stood at USD 5.12 billion.

Latest News:

• Quarterly Dividend: On November 16, 2021, the company declared a quarterly dividend of USD 0.025 per common share, paid on December 23, 2021, to shareholders of record on December 02, 2021.
• Exchange Offer: On December 13, 2021, VNT initiated an offer to exchange all of its outstanding unregistered (1.800% Senior Notes due 2026, 2.400% Senior Notes due 2028 and 2.950% Senior Notes due 2031) collectively referred to as Original Notes for an equal aggregate principal amount of the registered (1.800% Senior Notes due 2026, 2.400% Senior Notes due 2028 and 950% Senior Notes due 2031), referred as new notes. The new notes are similar to original notes, with an exception that the New Notes will be registered under the Securities Act of 1933, as amended, will not contain restrictions on transfer or related provisions regarding additional interest, will have different CUSIP numbers than the Original Notes, and will not be entailed by any of the Original Notes.

Q3FY21 Results:

• Flat Topline: VNT reported YoY growth of 2.92% in total revenue to USD 768.5 million in Q3FY21 (ended October 01, 2021) from USD 746.7 million in Q3FY20 (ended September 25, 2020), driven by growth in both segments.
• Contraction of Profitability: Net income for Q3FY21 was USD 127.3 million vs. USD 141.0 million in Q3FY20.
• Strong Balance Sheet: As of October 01, 2021, the company had cash & cash equivalents of USD 458.9 million and total debt of USD 2.59 billion.

Risks:

• Global Operational Risk: Outside of the United States accounted for roughly 30% of the company's sales in FY20. Out of the United States, VNT continues to build its sales and footprint, particularly in high-growth markets. As a result, global economic and regulatory landscape changes in the nations where the company works could harm its bottom line.

Outlook:

• FY21 Estimates: In 2021, VNP expects overall sales and sales from current businesses to increase YoY. Still, it will continue to evaluate the impact of the COVID-19 pandemic and geopolitical and regulatory uncertainty on its businesses.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

VNT Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

VNT's stock price has declined 11.92% in the past twelve months and is currently leaning towards the lower end of its 52-week range of USD 28.55 to USD 37.08. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 46.31. We have valued the stock using the EV/Sales multiple-based relative valuation methodology and arrived at a target price of USD 37.68.

Considering the correction in the stock price, decent profit margins, current valuation, and associated risks, we recommend a "Buy" rating on the stock at the closing price of USD 30.60, up 0.96% as of January 11, 2022.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

* Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

Disclaimer

The advice given by Kalkine Canada Advisory Services Inc. and provided on this website is general information only and it does not take into account your investment objectives, financial situation and the particular needs of any particular person. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. The website www.kalkine.ca is published by Kalkine Canada Advisory Services Inc. The link to our Terms & Conditions has been provided please go through them. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations later.