COVID-19 deaths in the United States have now risen for the third week in a row, as thousands of new cases continue to get reported every day. This has once again ignited fears in the minds of people and could lead to a surge in stockpiling.
Fears of a second wave could also once again give a boost to e-commerce sales that has already been benefiting from the pandemic with more people shopping online. Online shopping, which till sometime ago enjoyed a negligible percentage of total U.S. retail sales, has seen a sudden surge over the past few months.
E-Commerce Benefiting From COVID-19
One of the recent examples has been Shopify Inc. (SHOP - Free Report) . On Jul 29, the company said that it its second-quarter sales doubled following the pandemic-led lockdown. Shopify reported revenues of $714.3 million, up 97% from a year ago, with net income of $36 million, or 29 cents a share.
That uptick in demand for e-commerce platforms accrued to Shopify in the second quarter. Shopify said that the ongoing effect of the COVID-19 pandemic has accelerated the shift in consumers’ purchasing habits to e-commerce. New stores created on Shopify grew 71% in the second quarter from the first quarter while gross merchandise volume grew 119% year over year.
The story is much the same for other e-commerce firms. Retailers with a strong e-commerce presence have all been gaining since the virus outbreak.
E-Commerce Saving Retailers
Although retail sales jumped an impressive 7.5% month over month in June after a record 18.2% in June, March and April were two of the worst months when the country was almost locked down. However, e-commerce was the savior during this time, both for the industry as well as millions of Americans. Online sales are up a sizable 30.8% from a year ago.
The domestic economy has started reopening but the government is still struggling to contain the spread of the pandemic. Safety measures like stay-at-home orders and strict social distancing will ensure dependence on online delivery, especially grocery and household staples. Given this situation, it might be prudent to invest in e-commerce stocks. (Add stock selection criteria)
eBay Inc. (EBAY - Free Report) operates as an online shopping site that allows visitors to browse through available products listed for sale or auction through each company's online storefront.
The company’s expected earnings growth rate for the current year is 23.3%. The Zacks Consensus Estimate for current-year earnings has improved 12.9% over the past 60 days. eBay carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Kroger Co. (KR - Free Report) operates supermarkets, multi-department stores, marketplace stores and price impact warehouse stores. Its combination food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood, and organic produce; and multi-department stores provide apparel, home fashion and furnishings, outdoor living, electronics, automotive products, and toys.
The company’s expected earnings growth rate for the current year is 29.1%. The Zacks Consensus Estimate for current-year earnings has improved 15% over the past 60 days. Kroger sports a Zacks Rank #1.
Shopify Inc. provides a multi-tenant, cloud-based, multi-channel commerce platform for small and medium-sized businesses. Merchants use the company’s software to run business across various sales channels, including web and mobile storefronts, physical retail locations, social media storefronts and marketplaces.
The company’s expected earnings growth rate for the current year is 90%. The Zacks Consensus Estimate for current-year earnings has improved 11.8% over the past 60 days. Shopify carries a Zacks Rank #2 (Buy).
Etsy, Inc. (ETSY - Free Report) provides online and offline marketplaces to buy and sell goods. The company's product include art, home and living, mobile accessories, jewelry, wedding, and others.
The company’s expected earnings growth rate for the current year is 51.3%. The Zacks Consensus Estimate for current-year earnings has improved 9.5% over the past 60 days. Etsy holds a Zacks Rank #2.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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