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4 E-Commerce Stocks to Bet On With Above 100% YTD Gains in 2020

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E-commerce stocks have delivered outstanding performances so far this year, owing to the coronavirus pandemic-induced spike in online shopping. Moreover, 2020 has somewhat turned out to be the most favorable year for the e-commerce industry as it has highlighted the significance of online retail. This is evident from the robust performance of the Global X E-Commerce ETF (EBIZ), which has gained 67.2% on a year-to-date basis.

The pandemic-induced stay-at-home wave and social-distancing restriction have led to a drastic change in consumer preference and behavior. Retail companies have witnessed a major shift from offline shopping to online shopping.

These have resulted in strong growth in the global e-commerce traffic this year, which has been impressive. Further, strengthening momentum of online marketplaces across the world stayed encouraging.

Shopping forgrocery items, medicines and other essentials via online mode became the necessity of day-to-day lives in 2020. Additionally, the need for door-to-door delivery of essentials during this crisis scenario and the growing proliferation of fast-delivery services being offered by online retailers have been continuously driving online sales.

Blockbuster performance being delivered by the e-commerce giant Amazon (AMZN - Free Report) and other bigwigs like Alibaba (BABA - Free Report) , eBay, MercadoLibre (MELI - Free Report) and Wayfair (W - Free Report) for the past few consecutive quarters testifies the aforementioned facts well.

Plenty Growth Prospects

Notably, the rapidly increasing number of coronavirus cases, increasing health risks and deaths related to the same have been driving growth in this industry. Moreover, aggravating fear of being infected bythe COVID-19 virus among people on a worldwide basis will likely continue to proliferate online shopping further.

Apart from these, the e-commerce industry continues to grow, driven by the rapid adoption of smartphones and the Internet globally.

Further, the growing proliferation of m-commerce and online payment solutions, and infusion of AI and augmented reality into e-commerce services remain major positives.Additionally, online retailers’ deepening focus on expanding omni-channel presence is a key catalyst.

Hence, we note that the e-commerce space holds promise and is expected to sustain its momentum, owing to the above-mentioned factors.

Per a report from Statista, the global e-commerce market is expected to generate revenues of $2.4 trillion in 2020. The figure is anticipated to hit $3.3 trillion by 2025, witnessing a CAGR of 7.4% between 2020 and 2025. User penetration in this market, which is projected at 46.6% for 2020, is expected to reach 63.1% by 2025.

Here we have picked four stocks that not only benefit from the aforesaid strong fundamentals of the e-commerce space but also have been up more than 100% on a year-to-date basis, making them good investment opportunities.

Year-to-Date Price Performance

 

 

Our Picks

Overstock.com OSTK is riding on the solid demand for its e-commerce services amid the coronavirus-led lockdowns and shelter-in-place guidelines. The company’s refreshed focus on the home-furnishing vertical has been the major growth driver. The home furnishing space is expected to continue to grow as the housing sector recovers, with rising affluence in specific demographics, driving demand for home-goods items.

Shares of Overstock.com have soared 819.3% in the year-to-date period. The Zacks Consensus Estimate for 2020 earnings has moved up 276.7% to $1.13 per share over the past 60 days. For 2021, the consensus mark for earnings has moved 82.5% north to $1.15 per share over the same time frame.

The company presently carries a Zacks Rank #2 (Buy) and has a market cap of $2.64 billion. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Wayfair is being is driven by the strengthening of the direct retail business across the United States and international regions. Further, the company’s expanding active customer base is contributing well. It remains confident about growth prospects in markets, namely the U.K. and Germany. This can be attributed to its efforts to expand house-brand offerings in these countries.

Shares of Wayfair have soared 202.2% in the year-to-date period. The Zacks Consensus Estimate for 2020 earnings has moved up 75.6% to $4.74 per share over the past 60 days. For 2021, the consensus mark for earnings has moved 75.4% north to $2.28 per share over the same time frame.

The company carries a Zacks Rank #2 and has a market cap of $27.07 billion.

MercadoLibre is benefiting from strengthening online-to-offline offerings. Further, robust mobile-point-of-sale business and the growing adoption of MercadoPago are contributing well to the total payment volume growth of the company. Also, increasing traffic and engagement rate by buyers on the company’s online retail platform is a positive. The growing penetration of managed networks is another positive. Additionally, the rapid adoption of Mobile Wallet remains a major tailwind.

Shares of MercadoLibre have soared 191.9% in the year-to-date period. The Zacks Consensus Estimate for 2020 earnings has moved up 103.6% to $1.71 per share over the past 60 days. For 2021, the consensus mark for earnings has moved 139.8% north to $4.46 per share over the same time frame.

The company carries a Zacks Rank #3 (Hold) and has a market cap of $83.08 billion.

Carvana CVNA is gaining from its vertically integrated, online platform for buying and selling cars that provides a seamless customer experience and vast vehicle selection. Further, the red-hot used-car market and the rising adoption of online shopping are contributing well to the company’s top-line growth.Moreover, the accelerated shift to online used-car sales with consumers’ increasing comfort in purchasing big-ticket items online amid the coronavirus woes has been acting as a tailwind.

Shares of Carvana have soared 183.5% in the year-to-date period. The Zacks Consensus Estimate for 2020 loss has narrowed from $2.40 to $2.31 per share over the past 60 days. For 2021, the consensus mark for loss has narrowed from $1.46 to $1.38 per share over the same time frame.

The company carries a Zacks Rank #3 and has a market cap of $43.98 billion.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?

These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold.

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