It’s been three months since Coupang (NYSE:CPNG) went public at $35 a share. CPNG stock is like a tale of two seasons.

First, there’s its 40.7% first-day return. Second, there’s the e-commerce stock’s retreat ever since. 

Given the schizophrenic nature of CPNG stock, investors are left to wonder if it’s a $30 or $50 stock. 

I’ll look at both sides of the argument.

CPNG Stock Goes to $50

In the three months since CPNG went public, Amazon (NASDAQ:AMZN) has appreciated by 8.6%. The S&P 500 gained 8.4% over the same period. Coupang has trailed both, up 7.9%.

That’s got to be a major disappointment to SoftBank Group (OTCMKTS:SFTBY) CEO and founder Masayoshi Son, whose Vision Fund owns 33% of the company.

When I wrote about Coupang in April, I stated that the September lock-up expiration would be a headwind for the stock. However, given it’s come back to the pack considerably since its opening day, the likelihood of Son flooding the market with share sales in the fall lessens by the day.

If you haven’t bought CPNG yet, this is excellent news. You’ve still got a shot at buying its stock in the low $30s before it takes flight in the fall and winter. 

In my article, I explained that the possibility of Son’s two biggest investments of his career being e-commerce companies suggests that SoftBank could stick around for more than a few months. 

In the meantime, Coupang continues to produce excellent results. 

Coupang Growing Like Weeds

In mid-May, the company reported quarterly sales growth of 74% year-over-year (63% increase excluding currency) to $4.2 billion. In addition, the number of active customers increased 21% over Q1 2020 to 16.04 million with each active customer spending $262, 44% higher than a year ago. 

On the downside, its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $133.0 million, 218% higher than a year earlier. 

How do these results compare to Amazon’s Q1 2021 results?

Jeff Bezos’ baby delivered 41% year-over-year sales growth while its operating income increased by 122% to $8.9 billion. The company’s Amazon Web Services (AWS) cloud unit delivered almost 50% of operating profits in the quarter.

While Coupang doesn’t have a cloud business generating tremendous cash flow as Amazon does, my InvestorPlace colleague, Faisal Humayun, recently pointed out that its EBITDA margin is likely to turn positive in the next 6-12 months. 

In the meantime, he also points out that its net revenue per customer has grown from $127 in 2018 to $256 in 2020. And as I wrote earlier, it jumped to $262 in the first quarter of 2021.

Assuming it jumps by 50% by the end of 2022 to $384 per active customer, accompanied by a 25% increase in active customers in each of the next two years, it will finish 2022 with 23.1 million active customers [based on 14.8 million at the end of 2020].     

If this happens, Coupang could generate as much as $35.6 billion in annual revenue [23.1 million active customers multiplied by $384 multiplied by four quarters] at the end of 2022.

Based on a 10% EBITDA margin, it could also deliver a $3.6 billion profit by then. Based on a 50% increase in share count over the next two years to 2.4 billion, it could have 2022 earnings per share of $1.50. That values it at 25 times its 2022 earnings.

Considering how fast it’s growing, that seems more than reasonable. 

Coupang’s IPO Price Was Right

Coupang’s trailing 12-month revenue is $13.8 billion or 4.76x. You can buy Amazon for 4.0x sales, which gives you a strong global e-commerce business, AWS, and a growing ad business.   

Not to mention you’ve got the world’s wealthiest person sitting in the Executive Chairman’s seat should CEO-to-be Andy Jassey — currently head of AWS — fail to keep the company moving in the right direction. 

Frankly, as Jeff Bezos said in his February letter to employees about the change, Jassey’s been at the company almost as long as he has. So the odds of a bumpy transition seem low. 

Currently trading around $38 as I write this, investors can argue that CPNG stock was properly valued at $35 in its March IPO. 

As Coupang expands into Singapore and beyond, the big question for investors is whether the success it’s had in South Korea translates elsewhere. 

As my colleague points out, the company’s close to turning a profit. However, a major investment in Singapore will surely slow that possibility. 

Are investors willing to endure several more years of losses to say its business model works beyond the homey confines of South Korea? 

We’re about to find out. 

The Bottom Line

Until Coupang CEO and founder Bom Suk Kim deliver a poor quarter, I’m inclined to think that the e-commerce company is headed in the right direction. In my April article, I was very optimistic about its chances. 

“Until SoftBank waives the white flag and surrenders to its profits, Son is still very much in the e-commerce company’s corner,” I wrote. 

“CPNG stock is one of those money-losing stocks I don’t have a problem recommending. In the $30s closer to its IPO price would be ideal.”

So, if you buy now and hold for 18-24 months, I believe CPNG stock will be trading well over $50 by then. And, if you can get some in the low $30s, even better. 

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.