All major market indexes are currently trading near new highs, resulting in valuations significantly exceeding historical norms. The S&P 500’s current price-to-earnings (P/E) ratio stands at approximately 30, nearly double the historical average. This environment has made it difficult to find reasonably priced growth stocks in 2025, although the retail sector is presenting some attractive opportunities. Notably, two retail growth stocks were acquired by billionaires in the fourth quarter.
### 1. Coupang
Coupang, South Korea’s leading online retail company, has been noted for its strong growth and international expansion potential, attracting the interest of billionaires Howard Marks from Oaktree Capital Management and Chase Coleman from Tiger Global Management, who made investments in the company during the fourth quarter.
The company’s stock rebounded in the previous year, bolstered by strong financial results. Excluding the recent acquisition of the luxury goods marketplace Farfetch, Coupang’s revenue grew by 20% year over year in the third quarter, and by 25% when excluding currency fluctuations.
Coupang controls around 40% of the South Korean e-commerce market, a sector anticipated to grow from $124 billion in 2023 to $182 billion by 2028, according to Research and Markets. The company’s active customer base rose to 22.5 million in the last quarter, marking an 11% year-over-year increase.
However, Coupang’s reliance on South Korea poses a risk; to ensure long-term investor returns, the company must demonstrate that its business model can succeed in other regions where competition may be more intense. Thus far, Coupang has expanded its operations to Taiwan, Singapore, China, India, and Europe.
Investors such as Coleman and Marks likely see value in Coupang’s unique delivery system, capable of quickly delivering packages within densely populated urban areas, a challenge for many other e-commerce companies. The company has made significant progress in Taiwan, where it is heavily investing in growth.
Coupang’s stock trades at a price-to-sales (P/S) ratio of 1.6, lower than the P/S range during Amazon’s early growth period. At this valuation, investors can expect the stock to mirror the company’s growth, potentially leading to excellent returns over time.
### 2. Skechers
Skechers, a top footwear brand, is experiencing double-digit earnings growth but trades at just 16 times earnings. In the fourth quarter, Andreas Halvorsen of Viking Global Investors acquired a new position in Skechers’ stock.
Despite revenue growth at an annualized rate of 14% over the last decade, Skechers’ stock has persistently traded at a price-to-earnings ratio below 20, which seems unwarranted.
The company has established a strong footwear brand over several decades, offering style, comfort, and quality at affordable prices, which are key attributes of the Skechers brand. In the most recent quarter, sales increased by 13% year over year, with earnings rising by 26%.
These figures suggest that Skechers merits a higher valuation, especially as it expands into performance footwear and secures endorsements from professional athletes in basketball, golf, and baseball, efforts that could enhance brand recognition.
The stock, however, has declined due to concerns over potential impacts from U.S. tariffs on Chinese imports. Skechers manufactures its products in China and Vietnam, which could affect its short-term earnings. The stock decreased following its Q4 earnings report in January due to lower-than-expected guidance. Nevertheless, analysts project a 16% earnings growth for Skechers in 2025.
Viking Global likely anticipates that Skechers will adeptly manage tariff challenges by adjusting its supply chain, as it has done previously. In the long run, investors can expect the stock to produce returns in line with the company’s earnings growth, and potentially superior returns if the P/E ratio narrows the gap with the S&P 500 average.
