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E-Commerce Stocks' Q4 Earnings Due on Feb 23: MELI, W, STMP

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We are approaching the end of the earnings season with 411 S&P 500 members, representing 82.2% of the index’s total membership, having already reported their results.

As of Feb 17, total earnings of these companies were up 8% on a year-over-year basis (68.9% of the companies beat EPS estimates) while total revenue was up 4.9% (54.7% of the companies beat top-line estimates).

Notably, earnings and revenues so far have been better than the recent quarters and growth looks poised to reach its highest level in the last two years. Also, total earnings are on track to reach a new quarterly record.

Per our latest Earnings Preview, overall Oct-Dec 2016 quarter’s earnings for S&P 500 companies are anticipated to be up 7.4% from the year-ago period on revenues that are estimated to increase 3.9%.

For the technology sector in particular, earnings are anticipated to be up 9% year over year on 4.4% higher revenues.  As of Feb 17, 94.1% of the sector’s total market cap has already reported earnings with 71.4% beating on the top line and 71.4% topping on the bottom line. Total earnings for these companies are up 8.7% from the year-ago quarter on 6% higher revenues.

Here we take a look at three e-commerce companies, which are scheduled to release their fourth-quarter 2016 results on Feb 23.

Mercadolibre, Inc. (MELI - Free Report) , the largest online trading platform in Latin America, has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy), which make surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

This is because, per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 (Hold) to beat estimates.  You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

We don’t recommend Sell-rated stocks (Zacks Rank #4 or #5) going into the earnings announcement.

In Mercadolibre’s case, the surprise history is impressive, since the company has beaten estimates in each of the last four quarters with an average surprise of 23.6%.

Its shares have outperformed the Zacks Internet Commerce industry over the last one year. While the stock returned 98.6%, the industry gained 41.4%.

MercadoLibre, Inc. Price and EPS Surprise

Likewise, we don’t expect  Wayfair Inc. (W - Free Report) , to post an earnings beat as the company’s Earnings ESP of 0.00% complicates our surprise prediction in spite of its favorable Zacks Rank #3.

However, Wayfair’s surprise history is impressive as the company posted an average positive surprise of 11%, beating estimates in each of the last four quarters.

Coming to share price movement, over the last one year, the stock has underperformed the Zacks Internet Commerce industry. It returned just 0.15% compared with the industry’s gain of 41.1%.

Wayfair Inc. Price and EPS Surprise

Internet-based mailing and shipping services provider Stamps.com Inc. is not expected to beat earnings as well as it carries a Zacks Rank #3 and has an Earnings ESP of 0.00%.

Over the last four quarters, Stamps’ results compared favorably with the Zacks Consensus Estimate with an average positive surprise of 66.7%.

In terms of price performance, Stamps has outperformed the Zacks Internet Commerce industry over the last one year. It gained 43% compared with the industry’s gain of 41.4%.

Stamps.com Inc. Price and EPS Surprise

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