3 E-Commerce Stocks Outperforming the Market

3 E-Commerce Stocks Outperforming the Market

Posted On July 27, 2020 4:53 am

Even before the coronavirus era, e-commerce businesses were growing fast, while other parts of the retail industry were stagnating. E-commerce has some inherent advantages versus traditional brick-and-mortar stores because of their lower costs and the ability to reach a larger market.

And because of the Covid-19 pandemic, e-commerce is seeing impressive growth.  According to eMarketer.com, US e-commerce sales will surge 18.0% to $709.78 billion in 2020 and will reach an all-time high of 14.5% of total retail sales.

Here are three e-commerce stocks that should benefit from this surge in e-commerce:

Carvana Co. (CVNA)

CVNA, which is a second-hand online car dealing platform, has been rising since hitting its 52-week low of $22.16 on March 19th due to the coronavirus-led market crash and has gained more than 560% so far.

This momentum can be attributed to CVNA’s proactive approach to capitalize on the social-distancing era. Amid the economic volatility and political turmoil, more people are turning to the used car dealership market to avoid public transport and CVNA’s online mechanism is benefitting from this trend.

Ernie Garcia, CEO, and founder of CVNA said, “This quarter we implemented Touchless Delivery to offer the safest and easiest experience to buy a car. As the pioneers of online car buying, we’re proud to be leading our industry as shifts in customer behavior accelerate.”

CVNA launched CarvanaACCESS which is a direct purchase platform that gives dealers a chance to buy vehicles. The site also has an auction portion developed in collaboration with Manheim Digital.

In the first quarter, CVNA’s revenue increased by 45%, total gross profit increased 56% and vehicles purchased directly from customers increased 157% year over year. Moreover, CVNA’s consensus revenue estimate of $1.14 billion for the quarter ending June 2020 indicates a year-over-year increase of 23.6%. CVNA’s EPS is expected to grow 100% per annum in the next five years.

How does CVNA stack up for the POWR Ratings?

A for Trade Grade

A for Buy & Hold Grade

A for Peer Grade

A for Industry Rank

A for Overall POWR Rating

You can’t ask for better. The stock is also ranked #3 out of 54 stocks in the Internet industry.

Chewy, Inc. (CHWY)

CHWY is a favored choice for pet parents and its recent price performance reflects its strong business momentum. The stock has gained about 130% since hitting its year-to-date low at the beginning of March. CHWY’s eCommerce platform has been benefiting from the surge in demand for pet-related products during the current period due to the increasing number of home stayers.

The market expects the company to report EPS of negative $0.16 for the current quarter, representing an improvement over the year-ago EPS of negative $0.21. Moreover, CHWY’s consensus revenue estimate of $1.64 billion for the current quarter indicates a year-over-year increase of 41.9%.

CHWY’s EPS is expected to grow…

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