The e-commerce industry emerged as the backbone of the retail industry last year, generating $4.28 trillion in sales, representing a 27.6% year-over-year rise in 2020. These companies are investing heavily in tech solutions to analyze trends in consumer behavior and improving product filtering options and review sections to provide a personalized shopping experience to their users.
However, with rising brick-and-mortar sales with the reopening of the economy, e-commerce companies have been seeing lower traffic and orders. Therefore, we believe popular e-commerce stocks Cars.com Inc. (CARS – Get Rating) and iMedia Brands, Inc. (IMBI – Get Rating) are well-positioned to gain in the coming months owing to their strong fundamentals and loyal customer base. However, due to declining financials and weak market reach, we think shares of Rakuten Group, Inc. (RKUNY – Get Rating) and Farfetch Limited (FTCH – Get Rating) could continue witnessing corrections in the near term.
Stocks to Buy:
CARS is a leading digital automotive marketplace that helps car shoppers and owners buy, sell and service their vehicles. The company also offers online subscription advertising products, credible user and automotive and dealer reviews, sale of display advertising, and other digital solutions.
On May 4, 2021, CARS reached a milestone of 10 million reviews from car buyers on its platform, powered by its DealerRater technology. The company hopes to become the broadest and largest automotive review platform because more customers are reading these reviews before purchasing vehicles. In an announcement on April 29, Dealer Inspire, a CARS company that provides disruptive technology and digital advertising solutions to the automotive industry, said it had been selected by FordDirect, a Ford Motor Company (F) digital marketing and advertising platform, as a preferred website and technology platform provider for its 3,000 local U.S. dealerships. As the car shopping and buying process becomes more active digitally, with Dealer Inspire’s platform, FordDirect hopes to bring more efficiency in their marketing, operations and sales process, thus, delivering a better customer experience.
CARS’ total revenue increased 3.5% year-over-year to $153.30 million for its fiscal year 2021 first quarter, ended March 31. CARS’ operating income was $16.55 million, compared to a $905.06 million operating loss in the prior-year period. Its net income is reported at $5.28 million for the quarter, compared to a $787.43 million net loss in the year-ago period. CARS’ EPS was $0.08, compared to a $11.76 loss per share in the prior-year period.
A $0.41 consensus EPS estimate for the current quarter, ending June 30, 2021, represents a 240.2% improvement year-over-year. The $153.11 million consensus revenue estimate for the current quarter represents a 50.1% gain from the prior-year period. Analysts expect the stock’s EPS to grow at a 15% rate per annum over the next five years. The stock has gained 102.6% over the past year and closed yesterday’s trading session at $14.59.
CARS’ strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors with the weighting of each optimized to improve overall performance.
The stock has a B grade for Value, Growth and Sentiment. Click here to see the additional ratings for CARS (Quality, Stability and Momentum).
CARS is ranked #8 of 71 stocks in the Internet industry.
IMBI is a multiplatform interactive video and digital commerce company that offers a mix of brands directly to consumers through engaging and informative shopping experiences through television, online and mobile devices. The company’s products include jewelry and watches, home and consumer electronics, beauty, and fashion and accessories.
On April 29, IMBI launched 34 new brands on its national television networks ShopHQ, ShopBulldogTV and ShopHQHealth during the first quarter of 2021. The company hopes to improve the customer experience and expects to generate significant revenues from the sale of these brands’ collections.
In March, IMBI signed a licensing partnership with ReStore Capital, a Hilco Global company, in which IMBI will operate and…
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