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5 E-commerce Stocks Likely to Beat Estimates in Q3 Earnings
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The electronic-commerce sector continues to gather steam due to a significant increase in Internet usage, particularly in emerging economies like China and India. Online retail sales and mobile-commerce have also witnessed significant growth due to increased usage of Internet and smartphones.
The third-quarter 2018 reporting cycle has commenced, with 84 S&P 500 members reporting quarterly results as of Oct 19, according to the latest Earnings Preview. Total earnings of these companies are up 19.2% on a year-over-year basis on 8.4% higher revenues, with 82.1% beating EPS estimates and 61.9% beating revenue estimates.
The technology sector, which e-commerce stocks are part of, appears to be on a strong footing. For the sector, earnings are expected to improve 15% year over year while revenues are likely to rise 11.4%. Notably, it is one of the 10 sectors projected to report double-digit earnings growth in the quarter to be reported.
Let's Take a Closer Look at the E-commerce Sector
With digital buyer penetration likely to exceed 65% of Internet users globally in 2021, the e-commerce industry is set to expand.
Moreover, the all-important holiday quarter will give further impetus to the e-commerce sector.The volumeof holiday shopping done online is significant.
Forrester estimates online sales growth of 13.5% year over year. eMarketer projects e-commerce growth of 16.2% while Internet Retailer forecasts 15.5% growth year over year. The most upbeat estimate was given by Deloitte, which indicates17 to 22% increase in e-commerce sales in 2018 compared with 16.6% in 2017. Deloitte expects e-commerce sales to touch $128-$134 billion this year.
Moreover, smart technologies like chatbots along with AI, Augmented Reality (AR) and Virtual Reality (VR), and tools like machine learning and deep learning are helping retailers offer a personalized user experience, helping to drive the sector.
All said, the optimism surrounding the e-commerce sector is well reflected in its year-to-date performance. Notably, the industry has outperformed the S&P 500 on a year-to-date basis. Stocks in the industry have gained 6.3%. Meanwhile, the Zacks S&P 500 Composite has rallied 3.2%, whereas the Zacks Electronic Commerce Market has gained 6.3%.
How to Make the Right Pick?
Given the existence of a number of industry players, finding the right stocks that have the potential to beat earnings estimates could be a daunting task. Our proprietary methodology, however, makes it fairly simple for you. You could narrow down the list of choices by looking at stocks that have the combination of a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP.
Earnings ESP is our proprietary methodology for determining stocks that have the best chance to surprise with their next earnings announcement. It provides the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
Our Choices
Here we present five e-commerce providers that have the right combination of elements to post an earnings beat in the soon-to-be reported quarter:
Expedia, Inc. (EXPE - Free Report) — Bellevue, WA-based Expedia is one of the largest online travel companies in the world. We note that the company surpassed estimates in two of the trailing four quarters with an average positive surprise of 16.18%.
This Zacks Rank #1 stock has an Earnings ESP of +3.73%. The company is set to report third-quarter 2018 results on Oct 25.
IAC/InterActiveCorp (IAC - Free Report) — This leading media and Internet company beat the Zacks Consensus Estimate in two of the trailing four quarters, with an average positive earnings surprise of 36.39%.
This Zacks Rank #1 stock has an Earnings ESP of +12.08%. The company is set to report third-quarter 2018 results on Nov 7.
Amazon.com Inc. (AMZN - Free Report) — It is the undisputed leader and a trendsetter in the e-commerce space. The company offers consumers an unmatched level of convenience, which competitors are finding hard to replicate. Notably, the company outpaced the Zacks Consensus Estimate in each of the preceding four quarters, with an average positive earnings surprise of 1,347.10%.
eBay Inc. (EBAY - Free Report) —It is one of the largest online retailers in the world today. We note that the company surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average positive earnings surprise of 0.98%.
This Zacks Rank #3 stock has an Earnings ESP of +0.87%. The company is set to report third-quarter 2018 results on Oct 30.
Ctrip.com International, Ltd. —We note that the company beat the Zacks Consensus Estimate in the trailing four quarters, with an average positive earnings surprise of 110.03%.
The company is scheduled to release third-quarter 2018 results on Nov 7. Currently, Ctrip.com has an Earnings ESP of +4.17% and a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
5 E-commerce Stocks Likely to Beat Estimates in Q3 Earnings
The electronic-commerce sector continues to gather steam due to a significant increase in Internet usage, particularly in emerging economies like China and India. Online retail sales and mobile-commerce have also witnessed significant growth due to increased usage of Internet and smartphones.
The third-quarter 2018 reporting cycle has commenced, with 84 S&P 500 members reporting quarterly results as of Oct 19, according to the latest Earnings Preview. Total earnings of these companies are up 19.2% on a year-over-year basis on 8.4% higher revenues, with 82.1% beating EPS estimates and 61.9% beating revenue estimates.
The technology sector, which e-commerce stocks are part of, appears to be on a strong footing. For the sector, earnings are expected to improve 15% year over year while revenues are likely to rise 11.4%. Notably, it is one of the 10 sectors projected to report double-digit earnings growth in the quarter to be reported.
Let's Take a Closer Look at the E-commerce Sector
With digital buyer penetration likely to exceed 65% of Internet users globally in 2021, the e-commerce industry is set to expand.
Moreover, the all-important holiday quarter will give further impetus to the e-commerce sector.The volumeof holiday shopping done online is significant.
Forrester estimates online sales growth of 13.5% year over year. eMarketer projects e-commerce growth of 16.2% while Internet Retailer forecasts 15.5% growth year over year. The most upbeat estimate was given by Deloitte, which indicates17 to 22% increase in e-commerce sales in 2018 compared with 16.6% in 2017. Deloitte expects e-commerce sales to touch $128-$134 billion this year.
Moreover, smart technologies like chatbots along with AI, Augmented Reality (AR) and Virtual Reality (VR), and tools like machine learning and deep learning are helping retailers offer a personalized user experience, helping to drive the sector.
All said, the optimism surrounding the e-commerce sector is well reflected in its year-to-date performance. Notably, the industry has outperformed the S&P 500 on a year-to-date basis. Stocks in the industry have gained 6.3%. Meanwhile, the Zacks S&P 500 Composite has rallied 3.2%, whereas the Zacks Electronic Commerce Market has gained 6.3%.
How to Make the Right Pick?
Given the existence of a number of industry players, finding the right stocks that have the potential to beat earnings estimates could be a daunting task. Our proprietary methodology, however, makes it fairly simple for you. You could narrow down the list of choices by looking at stocks that have the combination of a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP.
Earnings ESP is our proprietary methodology for determining stocks that have the best chance to surprise with their next earnings announcement. It provides the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
Our Choices
Here we present five e-commerce providers that have the right combination of elements to post an earnings beat in the soon-to-be reported quarter:
Expedia, Inc. (EXPE - Free Report) — Bellevue, WA-based Expedia is one of the largest online travel companies in the world. We note that the company surpassed estimates in two of the trailing four quarters with an average positive surprise of 16.18%.
This Zacks Rank #1 stock has an Earnings ESP of +3.73%. The company is set to report third-quarter 2018 results on Oct 25.
IAC/InterActiveCorp (IAC - Free Report) — This leading media and Internet company beat the Zacks Consensus Estimate in two of the trailing four quarters, with an average positive earnings surprise of 36.39%.
This Zacks Rank #1 stock has an Earnings ESP of +12.08%. The company is set to report third-quarter 2018 results on Nov 7.
Amazon.com Inc. (AMZN - Free Report) — It is the undisputed leader and a trendsetter in the e-commerce space. The company offers consumers an unmatched level of convenience, which competitors are finding hard to replicate. Notably, the company outpaced the Zacks Consensus Estimate in each of the preceding four quarters, with an average positive earnings surprise of 1,347.10%.
The company is slated to report third-quarter 2018 results on Oct 25. Currently, Amazon has an Earnings ESP of +0.96% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
eBay Inc. (EBAY - Free Report) —It is one of the largest online retailers in the world today. We note that the company surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average positive earnings surprise of 0.98%.
This Zacks Rank #3 stock has an Earnings ESP of +0.87%. The company is set to report third-quarter 2018 results on Oct 30.
Ctrip.com International, Ltd. —We note that the company beat the Zacks Consensus Estimate in the trailing four quarters, with an average positive earnings surprise of 110.03%.
The company is scheduled to release third-quarter 2018 results on Nov 7. Currently, Ctrip.com has an Earnings ESP of +4.17% and a Zacks Rank #3.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>