All major market indexes are trading near new highs, pushing valuations well above historical norms. The current price-to-earnings (P/E) ratio for the S&P 500 is around 30, nearly double the historical average. This makes it challenging to find reasonably priced growth stocks in 2025, but the retail sector is turning up some good deals. Here are two retail growth stocks that billionaires were buying in the fourth quarter.

1. Coupang

Coupang (CPNG) is South Korea’s leading online retail company, attracting the attention of notable billionaires Howard Marks of Oaktree Capital Management and Chase Coleman of Tiger Global Management. The stock rebounded last year following strong financial results. Excluding Coupang’s recent acquisition of luxury goods marketplace Farfetch, revenue grew 20% year over year in the third quarter and 25% excluding currency changes.

Coupang controls nearly 40% of South Korea’s e-commerce market, which is expected to grow from $124 billion in 2023 to $182 billion by 2028. The active customer count reached 22.5 million last quarter, up 11% year over year. One risk for Coupang is its dependency on South Korea. To deliver satisfactory returns to investors over the long term, it will have to prove its business model can work in other geographies, where it may run into more competition. So far, Coupang has expanded operations to Taiwan, Singapore, China, India, and Europe.

Coleman and Marks may see value in Coupang’s unique delivery system, which can deliver packages within hours to customers living in densely populated cities. Management has seen great progress so far in Taiwan, where the company is putting a lot of investment into growth in that market.

These investors wouldn’t be buying the stock if they didn’t see value. The stock’s price-to-sales (P/S) multiple of 1.6 is lower than the average P/S range that Amazon traded at in its early years of growth. At this valuation, investors can expect the stock to follow the company’s growth, and that should translate to excellent returns over time.

2. Skechers

Top footwear brand Skechers (SKX) is growing earnings at double-digit rates, yet the stock trades at just 16 times earnings. In Q4, Andreas Halvorsen of Viking Global Investors bought a new position in the stock. Skechers stock seems to be perennially undervalued by investors. Despite growing revenue at an annualized rate of 14% over the last 10 years, the stock has consistently traded at a price-to-earnings ratio under 20, which seems unjustified.

The company has built a solid footwear brand over the last few decades. Customers value style, comfort, and quality at affordable prices, which has been the hallmark of Skechers’ brand. In the most recent quarter, sales grew 13% year over year, with earnings surging 26%.

The numbers clearly suggest that Skechers deserves a higher valuation. This is especially true as the company expands into performance footwear. It has signed several professional athletes across basketball, golf, and baseball, which could raise brand awareness. However, the stock has fallen recently over the potential impact of U.S. tariffs on imports from China. The company makes its shoes in China and Vietnam, and this could impact its near-term earnings. The stock is down since its Q4 earnings report in January on lower-than-expected guidance. However, analysts still expect Skechers to report earnings growth of 16% in 2025.

Viking Global probably expects Skechers to successfully navigate tariffs by adjusting its supply chain, as it did before. Over the long term, investors should expect the stock to deliver returns on par with the company’s earnings, and perhaps even better, if the P/E narrows the gap with the S&P 500 average.

Additional Insights and Analysis

Investing in retail stocks, especially those with strong growth potential, can be a lucrative strategy in a market near record highs. Coupang and Skechers offer unique opportunities for investors looking to capitalize on the e-commerce boom and the enduring popularity of affordable, high-quality footwear, respectively. Both companies have demonstrated resilience and adaptability in the face of market challenges, making them attractive options for long-term investors.

Coupang’s expansion into international markets and its innovative delivery system position it well for future growth. The company’s ability to deliver packages within hours in densely populated cities is a significant competitive advantage. As e-commerce continues to grow, Coupang’s model could become a blueprint for other retailers looking to enhance their delivery capabilities.

Skechers, on the other hand, has built a strong brand on the foundation of style, comfort, and affordability. The company’s foray into performance footwear and its partnerships with professional athletes could further enhance its brand image and attract a broader customer base. Despite the potential impact of tariffs, Skechers’ long-term growth prospects remain robust, supported by its strong financial performance and strategic initiatives.

For investors, the current market environment presents a mix of opportunities and challenges. While valuations are high, companies like Coupang and Skechers offer compelling growth stories. Investors should carefully consider the risks and potential rewards associated with these stocks and conduct thorough due diligence before making investment decisions. By focusing on companies with strong fundamentals and growth potential, investors can navigate the market’s complexities and achieve long-term success.

Potential Counterarguments

Critics may argue that the high valuations of the S&P 500 and other market indexes make it risky to invest in growth stocks. However, companies like Coupang and Skechers have demonstrated strong financial performance and growth potential, which could justify their valuations. Additionally, the retail sector’s resilience and adaptability in the face of market challenges suggest that these companies are well-positioned for future growth.

Another potential counterargument is the impact of tariffs on companies like Skechers, which rely on imports from China and Vietnam. While tariffs could impact near-term earnings, Skechers has a history of successfully navigating supply chain challenges. The company’s strategic initiatives and strong brand image position it well to weather potential disruptions and continue its growth trajectory.