In the bustling financial realm, e-commerce stocks are shining brighter than ever, effectively reshaping commerce. Once just a convenient alternative, online retail has essentially bulldozed traditional brick-and-mortar offerings. The pandemic acted as a major catalyst for the sector, catapulting consumers into recognizing the sheer ease and affordability of virtual shopping. As we advance, we are ushering in a transformative era in retail, with e-commerce poised to be its crown jewel for years, or even decades, to come.
Embracing this digital renaissance, the globe is projected to witness an 8.9% jump in e-commerce growth in 2023, for a staggering $5.8 trillion in sales.
In the whirlwind of analyst downgrades and chatter over Chairman Richard Liu’s arrest, JD.com (NASDAQ:JD)’s ADRs plummeted to their lowest levels since 2019. However, even amid these turbulent times, JD.com presents an enticing case of undervaluation. Its thriving direct sales model (1P) seamlessly dovetails with its burgeoning marketplace strategy (3P), drawing parallels with giants like Alibaba. What’s more, JD.com’s formidable, automated supply chain with a staggering network of more than 1,600 warehouses cements its supremacy in the competitive 3P space.
Investors, seemingly impacted by revenue speed bumps, seem to be overlooking the firm’s stellar margins. A deep dive into the fiscal details reveals a more telling story with a solid year-over-year revenue uptick of 6.80% overshadowed by a jaw-dropping EBITDA explosion of 134.2% — an unshakeable testament to its solid profitability positioning.
Mercado Libre (MELI)
Mercado Libre (NASDAQ:MELI), an Argentinian powerhouse at the intersection of e-commerce and fintech, continues to thrive while its peers falter. Its recent release reveals a rather buoyant second quarter, with a GAAP EPS of $5.20 outperforming market expectations by 88 cents. Revenue surged to $3.42 billion, for a robust 32.0% leap year-over-year, eclipsing forecasts by $150 million. The figures speak volumes, which include a staggering $42.1 billion in total payment volume (up a remarkable 96.6% YoY on an FX neutral basis) and gross merchandise volume of $10.5 billion (reflecting a solid 47.2% bump YoY).
MercadoLibre stands as a beacon of profitability in a turbulent market, with revenue and earnings scaling rapidly. The second quarter shone bright as profits more than doubled YoY. Its fintech segment, Mercado Pago, charted a stellar 24% growth YoY in U.S. dollars, while revenue swelled by 48% in local currency terms. For MercadoLibre, the financial horizon looks not just promising, but gleaming with potential.
Alibaba Group (BABA)
Navigating through a myriad of geopolitical headwinds and China’s tight regulatory grip, Alibaba Group (NYSE:BABA) is bouncing back, as evidenced by its powerful latest earnings report flashing green with revenue growth and a healthier EBITDA. This recovery, layered with strategic restructuring and solid fundamentals, highlights Alibaba’s resilience.
The company’s most recently released quarterly results show a resurgence, with consolidated revenue hitting RMB234.2 billion, up 14% year-over-year, backed by a significant uptick in operational income. Both domestic and international e-commerce segments flourished, signaling Alibaba’s unwavering vitality. Specifically, its Taobao & TMall segments witnessed a 13% revenue surge, propelled by robust sales in consumer electronics and a smarter advertising approach by its merchants. Meanwhile, the International Digital Commerce segment leapt a staggering 60% in sales due to strong performances across key platforms despite a temporary setback with its EBITDA.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines