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3 Top Small-Cap E-Commerce Stocks to Buy Now

3 Top Small-Cap E-Commerce Stocks to Buy Now

Posted On January 21, 2021 3:12 am
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l stores, online retail stores will only  gain more  momentum this year and beyond.

With economic recovery being the main focus of 2021, incoming U.S. President Joe Biden has announced ambitious plans to rejuvenate consumer spending through direct fiscal stimulus. He has already outlined a $1.9 trillion economic rescue package. This should bode well for online retailers.

Also, adequate government support in the form of subsidiaries and tax cuts to small companies should help them to recover  from pandemic-driven losses incurred during the initial days of lockdown last year. As e-commerce giants face restrictions from the regulators, small-cap companies with unique business models are poised to garner greater  investor attention.

We believe that betting on appropriate small-cap stocks now could be extremely rewarding.

1-800-FLOWERS.COM, Inc. (FLWS – Get Rating), e.l.f. Beauty, Inc. (ELF – Get Rating) and Lands’ End, Inc. (LE – Get Rating) are some of the top small-cap e-commerce stocks that should continue to bring heated competition to their peers in the coming months through their strategic expansion policies and growing footprint in global markets.

1-800-FLOWERS.COM, Inc. (FLWS – Get Rating)

FLWS offers gifts for various occasions in the U.S.. The company operates in three segments – Consumer Floral, Gourmet Foods & Gift Baskets, and BloomNet. It provides a range of products, such as floral and fruit arrangements, cookies, chocolates, candies, and plush stuffed animals, under the brand names Personalization Universe, Simply Chocolate, Goodsey and others.

On January 7, BloomNet, a wholly owned subsidiary of FLWS, announced that it had partnered with Card Isle to offer BloomNet Members exclusive access to a customizable greeting card gifting solution. We believe this will  help the company  attract new customers and drive business growth.

In October 2020, the company introduced a new multi-brand corporate gifting website that enables business customers to seamlessly access an expansive catalog of gift offerings. The customization features offered should allow FLWS to cater to a wide range of customers and elevate user experience.

FLWS’s revenue has increased 51.5% year-over-year to $283.77 million for the fiscal first quarter ended September 27, 2020. It performance was driven by strong growth in its three business segments and  contributions from PersonalizationMall.com, which the company acquired in August 2020. Its Gross profit rose 51.7% year-over-year to $115.48 million over this period.

The consensus EPS estimate of $1.29 for the current year indicates a 35.8% improvement from the year-ago value. Moreover, FLWS has an impressive earnings surprise history, with the company beating consensus EPS estimates in each of the trailing four quarters. The consensus revenue estimate of $1.78 billion for 2021 represents a 19.4% growth from the same period last year. The stock has gained 101.9% over the past year.

How does FLWS stack up for the POWR Ratings?

A for Trade Grade

B for Buy & Hold Grade

B for Peer Grade

B for Industry Rank

B for Overall POWR Rating.

The stock is also ranked #27 of 69 stocks in the Internet industry.

e.l.f. Beauty, Inc. (ELF – Get Rating)

Formerly known as J.A. Cosmetics Holdings, ELF offers cosmetic and skincare products worldwide, under the brand names e.l.f. and W3LL PEOPLE. The company sells its products through national and international retailers and direct-to-consumer channels.

Last November , ELF teamed  with Loserfruit, one of the leading social media influencers, to reach millions of Gen Z fans. The partnership should  enable the company to provide inclusive, positive, and energetic beauty to its customers globally, and build connections with new audiences in an authentic way.

ELF’s net sales have increased 7% year-over-year to $72.4 million, driven by strength in digital, as well as growth internationally in the third quarter ended September 30, 2020. Its gross margin has increased 100 basis points to 65% over this period.

The consensus EPS estimate of $0.68 for next year indicates a 9.7% increase year-over-year. Moreover, ELF beat the Street’s EPS estimates in each of the trailing four quarters, which is impressive. The consensus revenue estimate of…

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