3 E-commerce Stocks To Buy Off Strong Earnings Reports

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3 E-commerce Stocks To Buy Off Strong Earnings Reports

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E-commerce, or what we might informally call online shopping, is practically synonymous with Amazon (NASDAQ:AMZN) in the minds of many stock traders.

However, the emergence of other contenders means that there are less expensive alternatives to Amazon in the realm of e-commerce stocks.

It’s sometimes a fuzzy category because traditional brick-and-mortar retailers like Walmart (NYSE:WMT) and Target (NYSE:TGT) have made forays into the online-retail space. To alleviate the fuzziness, I’ve handpicked three worthy e-commerce stocks which primarily focus on online sales — and which might actually present a better deal than Amazon stock.

E-commerce Stock to Buy: Alibaba (BABA)

Sometimes traders refers to this company as the Chinese version of Amazon. The analogy makes sense because Alibaba (NYSE:BABA) has a massive presence in China.

3 Worthy E-commerce Stocks That Aren't Amazon
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The coronavirus from China has hit global e-commerce hard, but Alibaba CEO and Executive Chairman Daniel Zhang made an excellent point about the potential for a sector- and company-specific rebound: “17 years ago, the e-commerce business experienced tremendous growth after SARS. We believe that adversity will be followed by change in behavior among consumers and enterprises and bring ensuing opportunities.”

The coronavirus-induced drawdown in Chinese equities presents an opportunity as Alibaba is a tremendous revenue generator, as evidenced by the company’s solid third-quarter earnings figures. Percentage-basis growth in the company’s quarterly revenue (+38%), non-GAAP earnings per share (+49%), new retail business revenue (+128%), international retail business (+27%), local consumer service revenue (+47%) and cloud-computing revenue (+62%) suggest a company with outstanding rebound potential when coronavirus fears subside.

Shopify (SHOP)

While Amazon might be the granddaddy of them all, Shopify (NYSE:SHOP) is a worthwhile addition to the collection e-commerce competitors due to its unique angle: providing a one-stop-shop for online sellers to set up virtual stores to sell directly to shoppers.

3 Worthy E-commerce Stocks That Aren't Amazon
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Until the coronavirus panic set in, Shopify stock was on a tear and rightfully so: the platform’s merchant base comprises over a million businesses and the company’s revenues increased by a whopping 47% year-over-year during 2019’s first nine months.

Moreover, Shopify COO Harley Michael Finkelstein has constructed a compelling case to go shopping for Shopify stock on the coronavirus dip. As he pointed out during the company’s fourth-quarter conference call, Shopify’s “merchants did great, generating more than $61 billion in GMV [gross merchandise volume] in 2019, generating an average of more than $1 billion per week last year and positioning Shopify merchants on an aggregated basis as the second largest e-commerce retailer in the U.S.” — an understated but apt reference to Jeff Bezos’s behemoth.

Etsy (ETSY)

Perhaps the best way to tackle the Amazon monster is not to compete with it, and Etsy (NASDAQ:ETSY) has managed to sidestep much of the fierce e-commerce competitive landscape with a strictly niche approach.

3 Worthy E-commerce Stocks That Aren't Amazon
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By appealing to buyers and sellers of handmade goods, Etsy conveys a sense of authenticity that seems to capture the spirit of the millennial shopper — a powerful consumer segment that loves to shop online.

If you’re seeking numbers to back this up, look no further than the company’s fourth-quarter earnings results, which sent Etsy stock soaring on an overall red day for the equities markets. The consensus estimates for quarterly earnings per share ($0.16) and revenue ($264.9 million) were handily beaten by Shopify’s actual results of nearly $270 million in revenues and earnings of $0.25 per share. Needham analysts, who have assigned a price target of $64 for Etsy shares, commented that the company “anticipated a fairly strong fourth quarter and Etsy delivered” — and if the forward momentum persists, the stock could continue to deliver considerable gains regardless of the Amazon factor.

As of this writing, David Moadel did not hold a position in any of the aforementioned securities.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.


Article printed from InvestorPlace Media, https://investorplace.com/2020/02/3-e-commerce-stocks-to-buy-off-strong-earnings-reports/.

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