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5 Online Retailers to Buy on Solid Sales in September
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On Oct 17, the Department of Commerce reported that retail sales in September increased 0.7% month over month, significantly beating the consensus estimate of 0.3%. Moreover, the metric for August was revised upward to an increase of 0.8% from 0.6% reported earlier. Within overall retail sales, online sales grew 1.1% in September, second only to a 3% jump in miscellaneous store retailers.
Internet - Commerce continues to evolve as the technologies driving it advance. On the one side are increasingly powerful and capable user devices. On the other are sophisticated, AI-enabled software platforms facilitating transactions more capable of delivering user satisfaction.
Differentiation comes from better technology for improved showcasing, easier navigation and payment, speedier delivery and returns, brand building, comparison shopping, loyalty, etc., as well as more shipping options, which generally tip the scales in favor of larger players.
Within the Retail sector, the Zacks-defined Internet-Commerce industry is currently in the top 37% of the Zacks Industry Rank. Year to date, the industry has provided 32% returns. Since it is ranked in the top half of Zacks Ranked Industries, we expect the e-commerce industry to outperform the market over the next 3 to 6 months.
Our Top Picks
We have narrowed our search to five e-commerce stocks with strong potential for 2024. These stocks have seen positive earnings estimate revisions in the last 90 days.
Amazon.com Inc. (AMZN - Free Report) has been benefiting from a strengthening AWS services portfolio and its growing adoption rate has contributed well. Ultrafast delivery services and an expanding content portfolio are positives for AMZN. The strengthening relationship with third-party sellers is also encouraging. Its advertising business is also making a robust contribution. Improving Alexa skills along with robust smart home product offerings are tailwinds for AMZN.
Amazon has an expected revenue and earnings growth rate of 12.9% and 38.2%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 3.2% over the last 90 days.
Carvana Co. (CVNA - Free Report) has been benefiting from acquisitions. The acquisition of Car360 has enhanced CVNA’s 360-degree photo capabilities with 3D computer vision and augmented reality. The acquisition of ADESA's U.S. operations has solidified CVNA’s logistics network and auction capabilities.
It is expected to unlock approximately 2 million units of incremental annual production capacity at full utilization. CVNA’s efforts to increase its penetration in existing markets, enter new markets, gain more customers and strengthen its marketing activities are likely to aid the firm.
Carvana has an expected revenue and earnings growth rate of 12.7% and 27.8%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 2.2% over the last 90 days.
Cars.com Inc. (CARS - Free Report) operates an online automotive platform. CARS offers new and used vehicle listings, expert and consumer reviews, research tools and other information. CARS also engaged in the sale of display advertising to national advertisers.
Cars.com has an expected revenue and earnings growth rate of 6.4% and 59%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 5.7% over the last 90 days.
Groupon Inc. (GRPN - Free Report) operates a marketplace that connects consumers to merchants. GRPN is taking initiatives to improve customer engagement and retention by orienting its marketplace to serve everyday customer problems instead of just focusing on discounts. This involves monitoring prices as well as the removal of high refunding merchants. GRPN is looking to save costs annually by lowering tech costs through automation.
Groupon has an expected revenue and earnings growth rate of 5.9% and more than 100%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved more than 100% over the last 90 days.
Rover Group Inc. provides an online marketplace for pet care. ROVR connects pet parents with pet providers who offer overnight services, including boarding and in-home pet sitting, as well as daytime services, including doggy daycare, dog walking, drop-in visits and grooming.
Rover Group has an expected revenue and earnings growth rate of 17.7% and more than 100%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved more than 100% over the last 90 days.
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5 Online Retailers to Buy on Solid Sales in September
On Oct 17, the Department of Commerce reported that retail sales in September increased 0.7% month over month, significantly beating the consensus estimate of 0.3%. Moreover, the metric for August was revised upward to an increase of 0.8% from 0.6% reported earlier. Within overall retail sales, online sales grew 1.1% in September, second only to a 3% jump in miscellaneous store retailers.
Internet - Commerce continues to evolve as the technologies driving it advance. On the one side are increasingly powerful and capable user devices. On the other are sophisticated, AI-enabled software platforms facilitating transactions more capable of delivering user satisfaction.
Differentiation comes from better technology for improved showcasing, easier navigation and payment, speedier delivery and returns, brand building, comparison shopping, loyalty, etc., as well as more shipping options, which generally tip the scales in favor of larger players.
Within the Retail sector, the Zacks-defined Internet-Commerce industry is currently in the top 37% of the Zacks Industry Rank. Year to date, the industry has provided 32% returns. Since it is ranked in the top half of Zacks Ranked Industries, we expect the e-commerce industry to outperform the market over the next 3 to 6 months.
Our Top Picks
We have narrowed our search to five e-commerce stocks with strong potential for 2024. These stocks have seen positive earnings estimate revisions in the last 90 days.
Amazon.com Inc. (AMZN - Free Report) has been benefiting from a strengthening AWS services portfolio and its growing adoption rate has contributed well. Ultrafast delivery services and an expanding content portfolio are positives for AMZN. The strengthening relationship with third-party sellers is also encouraging. Its advertising business is also making a robust contribution. Improving Alexa skills along with robust smart home product offerings are tailwinds for AMZN.
Amazon has an expected revenue and earnings growth rate of 12.9% and 38.2%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 3.2% over the last 90 days.
Carvana Co. (CVNA - Free Report) has been benefiting from acquisitions. The acquisition of Car360 has enhanced CVNA’s 360-degree photo capabilities with 3D computer vision and augmented reality. The acquisition of ADESA's U.S. operations has solidified CVNA’s logistics network and auction capabilities.
It is expected to unlock approximately 2 million units of incremental annual production capacity at full utilization. CVNA’s efforts to increase its penetration in existing markets, enter new markets, gain more customers and strengthen its marketing activities are likely to aid the firm.
Carvana has an expected revenue and earnings growth rate of 12.7% and 27.8%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 2.2% over the last 90 days.
Cars.com Inc. (CARS - Free Report) operates an online automotive platform. CARS offers new and used vehicle listings, expert and consumer reviews, research tools and other information. CARS also engaged in the sale of display advertising to national advertisers.
Cars.com has an expected revenue and earnings growth rate of 6.4% and 59%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 5.7% over the last 90 days.
Groupon Inc. (GRPN - Free Report) operates a marketplace that connects consumers to merchants. GRPN is taking initiatives to improve customer engagement and retention by orienting its marketplace to serve everyday customer problems instead of just focusing on discounts. This involves monitoring prices as well as the removal of high refunding merchants. GRPN is looking to save costs annually by lowering tech costs through automation.
Groupon has an expected revenue and earnings growth rate of 5.9% and more than 100%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved more than 100% over the last 90 days.
Rover Group Inc. provides an online marketplace for pet care. ROVR connects pet parents with pet providers who offer overnight services, including boarding and in-home pet sitting, as well as daytime services, including doggy daycare, dog walking, drop-in visits and grooming.
Rover Group has an expected revenue and earnings growth rate of 17.7% and more than 100%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved more than 100% over the last 90 days.