The investment opportunity of a lifetime: 1 high-growth e-commerce stock to buy now and hold forever

Amazon is one of the best-performing stocks of all time: The e-commerce and technology giant has grown more than 1,000-fold since going public, capitalizing on a major consumer shift from in-person shopping to online shopping (among other things).

Amazon remains a great business, but with a market cap of $1.9 trillion, it’s highly unlikely it can replicate the profits of the past 20 years. That may be disappointing for new investors who missed out on most of Amazon’s gains. But what if investors could own shares in the next Amazon of East Asia?

input Coupang (CPNG -1.38%)The South Korean e-commerce giant is making waves in its home country and expanding into new markets — here’s why, at its current share price, this could be a once-in-a-lifetime investment opportunity.

Korean Amazon

Founded in 2010, Groupon Clone, Coupang turns to copying AmazonCoupang is a Korean company that follows the same business model as Amazon, but was created for the Korean market. It has many similarities to Amazon’s retail business, such as subscription membership, vertically integrated delivery, and video streaming, but also has the elements to succeed in the small Asian country. For example, customers can return their packages by leaving a reusable return box outside their front door, which is then picked up by a Coupang driver.

It’s this customer value proposition that has made Coupang the leading e-commerce platform in South Korea. Revenue last quarter was $7.1 billion, up 23% year over year, excluding the impact of foreign currency fluctuations, and excludes the Farfetch acquisition. Gross profit has grown more quickly, up 27% last quarter excluding Farfetch, due to the growth of its third-party marketplace for other e-commerce retailers.

Those growth rates are much faster than Coupang’s overall e-commerce market. Retail spending in South Korea is about $500 billion annually, giving Coupang plenty of room to grow if it can convince more customers to adopt its services, such as food delivery and groceries.

Expanding into Taiwan?

While Coupang has plenty of room to grow in Korea, it’s not a huge market like the U.S. or China. Luckily, management is forward-thinking and has been testing different ways to expand into other Asian regions with wealthy consumers who can spend money on e-commerce platforms. The company recently landed in Taiwan, a major investment destination.

The region is expected to see strong growth initially as it builds infrastructure to replicate the vertically integrated services it offers in South Korea. Revenue from Coupang’s “services in development” division, excluding Farfetch, grew 143% year-over-year, with most of that growth coming from Taiwan. While the market is small and unprofitable at present, the island nation is home to nearly 25 million people, and there is a big opportunity for Coupang to expand its e-commerce platform outside of South Korea.

CPNG Free Cash Flow Data by YCharts

This stock is cheap for patient investors

Currently, Coupang has a market capitalization of $38 billion. Over the last 12 months, the company generated $1.45 billion in free cash flow, giving it a price-to-free cash flow (P/FCF) ratio of 26, close to the market average. However, we expect the stock to generate market-beating returns over the next five years or more.

First, the company’s free cash flow has been sluggish over the past 12 months due to capital expenditures for growth, particularly in Taiwan. The company has spent nearly $1 billion on new infrastructure during that time. Also, gross profit has increased by more than 30%, growing faster than the market average. While this level of growth won’t last forever, the company believes it will maintain double-digit growth rates for many years to come.

At a market-average earnings multiple, I think Coupang is a cheap stock for patient investors who want to hold for the long term.