Due to COVID-19 pandemic-related restrictions, lower foot traffic at brick-and-mortar stores forced businesses at the beginning of the pandemic to shift their operations online and sell products through e-commerce platforms. Furthermore…
providing a personalized shopping experience to keep pace with changing consumer tastes, multi-channel inventory management, the tracking of shipments, and contactless delivery services helped the U.S. e-commerce industry deliver 14% sales growth last year. The global B2C e-commerce market is expected to grow at a 9.7% CAGR to $7.65 trillion by 2028.
Although the easing of pandemic restrictions enabled brick-and-mortar sales to outgrow e-commerce sales in 2021, e-commerce companies’ efforts to make delivery services and return policies convenient should help them grow in the coming months.
Given this backdrop, Wall Street analysts are optimistic about the upside potential of e-commerce stocks Shopify Inc. (SHOP – Get Rating), Pinduoduo Inc. (PDD – Get Rating), Angi Inc. (ANGI – Get Rating), Overstock.com, Inc. (OSTK – Get Rating), and ContextLogic Inc. (WISH – Get Rating). They expect these stocks to rally by more than 50% in price in the near term.
Shopify Inc. (SHOP – Get Rating)
Based in Ottawa, Canada, SHOP provides a cloud-based, multi-channel commerce platform designed for small- and medium-sized businesses internationally. The company offers a platform that enables merchants to create an omnichannel experience to manage products and inventory, process orders and payments, ship orders, build customer relationships, leverage analytics and reporting, and access financing.
On Nov. 8, 2021, SHOP’s Shopify Plus platform selected Rebuy, a no-code omnichannel personalization platform for e-commerce brands on Shopify, to join the Certified App Partner program. Rebuy’s personalization, marketing, retention services, white-glove support, and a custom shopping cart should enable SHOP to help its merchants improve their shopping experience.
For its fiscal 2021 fourth quarter, ended Dec. 31, 2021, SHOP’s revenues increased 41.1% year-over-year to $1.38 billion. Its revenue from merchant solutions came in at $1.03 billion for the first time in a quarter, up 47.3% from the prior-year period. The company’s gross profit was $692.66 million, representing a 37.3% increase from the prior-year period. The company had cash and cash equivalents of $2.50 billion as of December 31, 2021.
Analysts expect SHOP’s EPS to improve 6.9% year-over-year to $8.72 for its fiscal 2022, ending Dec. 31, 2022. It surpassed the consensus EPS estimates in three of the trailing four quarters. The $53.19 billion consensus revenue estimate for the same fiscal year represents an 18.7% rise from the prior-year period. The company’s EPS is expected to grow at a 38.2% rate per annum over the next five years.
SHOP’s revenue has grown at a 62.6% CAGR over the past three years. It has declined 40.2% in price over the past month to close yesterday’s trading session at $660.
Of 28 Wall Street analysts that have rated the stock, 13 have rated it a Buy, while 15 rated it Hold. Analysts expect the stock’s price to hit $1,061.08 in the near term, representing a 60.8% upside potential.
Pinduoduo Inc. (PDD – Get Rating)
Headquartered in Shanghai, China, PDD operates a mobile e-commerce platform called Pinduoduo that provides value-for-money merchandise and interactive shopping options. It offers a range of products, including apparel, shoes, childcare products, food and beverage, fresh produce, electronic appliances, furniture and household goods, cosmetics and other personal care items, sports and fitness items, and auto accessories.
On Nov. 26, 2021, PDD pledged to deepen its…
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