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3 Internet Stocks to Buy After Prime Day

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Tuesday marked another important day for Amazon (AMZN - Free Report) as the company celebrated its second annual Prime Day, an online shopping holiday with deals available exclusively to Amazon Prime subscribers.

Other than some minor technical glitches, Prime Day was once again a roaring success for Amazon. In a press release recapping the event, the company described this year’s Prime Day as “the biggest day ever for Amazon.”

“Amazon today announced customer orders surpassed Prime Day 2015 by more than 60% worldwide and more than 50% in the U.S. It was also the biggest day ever for Amazon devices globally and record Prime Day for each Amazon device category including Fire TV, Fire tablets, Kindle e-readers and Alexa-enabled devices,” the press release said.

While this is all certainly good news for Amazon, it’s also welcome news for the rest of the e-commerce industry. No one is saying that a massive sale on another site necessarily benefits anyone else, but the success of Prime Day once again proves that shoppers have moved online.

There is still a place in the retail landscape for brick-and-mortar stores, but Prime Day and its extensive list of deals highlights the fact that customers will now purchase just about anything in the comfort of their own homes. Everything, from electronics and DVDs to groceries and clothing, was on sale Tuesday, and there were plenty of interested buyers to go around.

With that said, Amazon Prime Day puts the spotlight back on the e-commerce market as the premier segment of the retail industry. Luckily, we can use the Zacks Rank to find internet stocks that are already in a good position to succeed.

1.       Ebay Inc. (EBAY)

Ebay is currently a Zacks Rank #2 (Buy) and has seen one positive estimate revision for its annual earnings within the last seven days. Interestingly enough, Ebay’s online shopping platform is probably the most comparable to Amazon’s and it should benefit from shoppers buying things online more frequently. Earnings are expected to decline this year, but Ebay has proven its ability to surpass expectations, edging out the Zacks Consensus Estimate by an average of 6.70% over the trailing four quarters.

 

2.       Shopify Inc. (SHOP - Free Report)

Unlike Amazon and Ebay, Shopify isn’t a shopping location for consumers, per se. Instead, the company offers cloud-based software to help merchants design, set up, and manage their own online stores. Shopify currently has a Zacks Rank #2 (Buy), and although it remains a loss-making company, sales are expected to grow by nearly 68% this year, proving that the customers are there. Amazon’s Web Services also shows Shopify investors that cloud-based services are in high demand right now.

 

3.       Stamps.com (STMP - Free Report)

This is a company that probably best proves my point about shoppers moving online for basically anything. One doesn’t even have to leave their home to ship something these days, and that’s thanks to Stamps.com’s business. This stock is currently a Zacks Rank #1 (Strong Buy), and sales and earnings are expected to grow by 50% and 38%, respectively, this year. Investors should have some caution here as the stock has been volatile recently thanks to a regulatory probe by the United States Postal Service. If the company can move past that soon, Stamps.com should be in a good position for the long-run.

 

Bottom Line

While Amazon basks in the glory of another successful Prime Day, the e-commerce giant has unintentionally shifted a lot of focus back onto the industry as a whole. It’s clear that shoppers are online even more frequently these days, and these three companies are also looking to cash in on that market.

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