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E-commerce Booms During Coronavirus Pandemic: 4 Stocks to Buy

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Shilpa Mete
·5-min read
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The coronavirus (COVD-19) pandemic has been favoring the e-commerce industry significantly over the past few months primarily driven by the need of door-to-door delivery of essentials during this crisis scenario.

This is evident from the latest ACI Worldwide report per which the e-commerce sales soared 81% year over year in May 2020. Surge in the demand for gaming, sports goods and housewares among others remained major positive.

Further, solid momentum across online grocery shopping has been spurring growth in online retail sales across several parts of the world, especially in the United States. Moreover, online grocery retail continues to gain steam, owing to fears of contracting the highly contagious virus.

Per a Coresight Research data quoted by Supermarket News, the online grocery sales in the United States are expected to surge 40% this year owing to social distancing and shelter-in-place restrictions.

We believe growing proliferation of ultrafast delivery services andrapid adoption of online payment applications are likely to remain the key catalysts in the e-commerce space for the rest of the 2020.

Moreover, shift in the consumer spending pattern to e-commerce is gaining traction due to COVID-19 induced health risks.

For instance, the e-commerce giant Amazon AMZN, which is renowned for its ultrafast delivery services, solid distribution network and Prime enabled customer rewards, is witnessing flurry of orders on account of customers’ unwillingness to visit offline stores in this pandemic situation.

Additionally, strengthening delivery services of traditional retailers like Walmart, Target, Kroger and Costco which have adopted e-commerce technology, to cater to the rising demand of the customers highlights the prospects of online retail.

According to a report from eMarketer, the e-commerce sales in the United States are expected to hit $709.78 billion in 2020 by exhibiting growth of 18%, which is up from the prior projection of 13%.

With regard to worldwide growth, a report by Statista shows that the e-commerce space is expected to cross revenues of $2.3 trillion in 2020. Further, the report suggests that revenues are anticipated to witness a CAGR of 8.1% between 2020 and 2024 to reach $3.1 trillion by 2024.

E-commerce Attracts Companies

Apart from the above mentioned traditional retailers, several tech companies are also leaving no stone unturned to capitalize on prospects present in the e-commerce space.

Notably, Shopify SHOP recently partnered with Walmart to bolster e-commerce capabilities. Both the companies have introduced a channel to enable Shopify merchants to offer products on Walmart.com.

Further, Alphabet’s GOOGL Google has been making strong efforts to reinforce presence in the e-commerce world on the back of its advanced technologies. It recently strengthened its ties with Carrefour by launching a voice-based grocery shopping service via Google Assistant in France that will bolster the French retailer’s food e-commerce footprint.

Hence, investing in this space amid growing e-commerce interest of the abovementioned companies to capitalize on the current scenario is surely enticing.

Our Picks

Given the immense growth opportunities, investors can tap the following e-commerce stocks that hold strong fundamentals. Moreover, these stocks have outperformed the S&P 500 index on a year-to-date basis.

Year-to-Date Price Performance



 

eBay EBAY is gaining on strong momentum across its managed payment offerings, which bodes well for its gross merchandise volume. Additionally, strength in promoted listings is encouraging.

Further, the company’s initiatives toward enhancing seller experience by offering innovative seller tools and delivering better buyer experience by building product catalogs utilizing structured data hold promise.

eBay currently sports a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for 2020 earnings has been revised upward by 11.7% in the past 30 days to $3.45 per share.

JD.com JD is riding on its JD Retail segment, which is a key catalyst courtesy of its robust omni-channel strategy.

Further, the company’s New Businesses segment is a major positive. Its strengthening momentum across third-party logistics, Flash Delivery initiative and expanding 24-hour delivery service are other tailwinds. Further, the integration of AI into JD’s warehouse network is expected to continue accelerating the delivery of its direct sales orders.

JD.com currently flaunts a Zacks Rank #1. The consensus mark for 2020 earnings has been revised upward by 7.8% in the past 30 days to $1.24 per share.

Wayfair W has been witnessing strong acceleration in new and repeat customer orders. Also, an expanding active customer base and strength in the company's direct retail business remain positives.

It is aggressively investing in international regions in order to bolster presence and expand in-house-brand offerings.

Wayfair currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for 2020 is pegged at a loss of $4.23 per share, having narrowed from a loss of $4.53 in the past 30 days.

Fiverr International FVRR is benefiting from marketing efficiency, and strong focus on product and technology enhancements.

Further, the launch of four industry stores — Gaming, E-commerce, Architecture and Politics — is expected to aid the company in expanding catalog and gaining momentum across larger businesses. Also, the company’s accelerated AI efforts through personalization and customer support are likely to bolster sales in the near term.

Fiverr currently carries a Zacks Rank #2. The consensus mark for 2020 is pegged at a loss of 31 cents per share, having narrowed from a loss of 35 cents in the past 30 days.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>


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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
eBay Inc. (EBAY) : Free Stock Analysis Report
 
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
 
JD.com, Inc. (JD) : Free Stock Analysis Report
 
Wayfair Inc. (W) : Free Stock Analysis Report
 
Shopify Inc. (SHOP) : Free Stock Analysis Report
 
Fiverr International Lt. (FVRR) : Free Stock Analysis Report
 
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