Overlooking the rapid growth potential of e-commerce might leave some investors feeling out of step, perhaps even a bit behind the curve. While general consumer behavior has stabilized post-pandemic, e-commerce spending is expected to continue trending up. The goal for prudent investors is to smartly engage with top e-commerce stocks, which are likely to benefit from the industry’s steady expansion.
Companies innovating and scaling within this established sector are likely to find themselves ahead of the game, avoiding the all-too-common facepalm of missed opportunities. With that said, here are three of the top e-commerce stocks worth wagering on for the long haul.
MercadoLibre (MELI)
MercadoLibre (NASDAQ:MELI), the Argentinian titan in e-commerce and fintech, is sailing through a rather tumultuous economic storm while its peers continue to flounder. Casting a glow on its second quarter, it comfortably beat market expectations with a GAAP earnings per share (EPS) of $5.16 while besting revenue forecasts by a hefty $150 million, clocking in at a remarkable $3.42 billion, a 32% year-over-year (YOY) bump from the prior-year period. These numbers are anchored by a formidable $42.1 billion total payment volume, up a mighty 96.6% YOY, and a gross merchandise volume that shot up to $10.5 billion, marking a 47.2% increase on a YOY basis.
Moreover, amid a sea of uncertainty, the company has emerged as a juggernaut of profitability. Its second quarter performance has witnessed its earnings more than double from the previous year. Its fintech arm, Mercado Pago, also boasted a remarkable 24% growth in U.S. dollars, with local currency revenue expanding by a rapid 48%. Additionally, with a forward revenue growth rate of 34.22% and EBITDA growth at a robust 68.49%, this company is demonstrating rapid momentum.
Alibaba Group (BABA)
Alibaba Group (NYSE:BABA) is effectively charting a course toward renewed prosperity, with its latest earnings report pointing to a powerful rebound. The e-commerce giant is thriving, with strategic maneuvers and core strengths playing key roles in its comeback. The company’s recent quarterly figures are a testament to this resurgence, with revenue climbing to RMB 234.2 billion, an impressive 14% increase YOY.
Its stellar performance is spearheaded by Taobao and TMall platforms, which experienced a 13% revenue boost thanks to a surge in consumer electronics sales and more efficient merchant marketing strategies. Likewise, its International Digital Commerce arm is making waves with a jaw-dropping 60% sales increase in the quarter, illustrating BABA’s global appeal.
Further cementing its e-commerce hegemony, Alibaba Cloud has unveiled the AI-powered Tongyi Qianwen, a cutting-edge model likely to enhance the Alibaba ecosystem further. This innovation promises to efficiently refine user interaction while democratizing AI development, revolutionizing customer experiences, voice assistance, and, most importantly, e-commerce efficiency.
Etsy (ETSY)
Etsy (NASDAQ:ETSY), known for its eclectic mix of crafts, handmade goods, and vintage items, is back in the conversation of the top e-commerce stocks to buy right now. Despite some dips in habitual buying behaviors, Etsy’s revenue has swelled in the past couple of quarters, with price adjustments and a sharp turn toward international markets strengthening its financials.
The tapestry of its third quarter results illustrates an even more vibrant period for Etsy, with a GAAP EPS of 64 cents, which comfortably outpaced market estimates. Sales continued to rise, reaching $636.3 million, a 7% increase YOY, tipping the scales beyond expectations. Looking ahead, the fourth quarter presents a guarded gross merchandise sales forecast, but a potential bump in its YOY performance remains within reach, underpinned by an anticipated take rate of 20.8% and a robust adjusted EBITDA margin forecast of 26% to 27%.
In the wider e-commerce sphere, eBay (NASDAQ:EBAY) stock emerges as a compelling narrative, trading at a mere 17 times future earnings. This valuation suggests it’s an undervalued gem in the digital marketplace, hinting at an attractive investment opportunity.
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.
