Is Coupang, Inc. overvalued or undervalued?

As of 25 February 2025, Coupang, Inc. has moved from a fair to a very expensive valuation grade. The company is currently overvalued, with a P/E ratio of 337, significantly higher than its peers, such as Amazon.com, Inc. at 36.48 and MercadoLibre, Inc. at 58.78. Additionally, Coupang's EV to EBITDA stands at 52.73, again outpacing its competitors, which raises concerns about its current market price of $28.38.
The company's ROE is notably low at 3.51%, despite a high ROCE of 251.43%, indicating that while it generates returns on capital, it struggles to translate that into shareholder equity effectively. The valuation metrics suggest that Coupang is not only overvalued compared to its industry peers but also reflects a disconnect between its market price and fundamental performance. Recent stock performance shows Coupang outperforming the S&P 500 year-to-date, but this may not justify its elevated valuation levels.