4 E-Commerce Stocks Down More Than 20% YTD That Wall Street Loves
The e-commerce industry has suffered a decline lately as part of the broader market sell-off on concerns over high inflation and the Fed's decision to hike interest rates several times...
The e-commerce industry has suffered a decline lately as part of the broader market sell-off on concerns over high inflation and the Fed's decision to hike interest rates several times this year. However, e-commerce companies are expected to achieve steady growth this year due to rising consumer spending and a shift in consumer preference. Therefore, Wall Street analysts expect quality e-commerce stocks MercadoLibre (MELI), Wayfair (W), Ozon (OZON), and Fiverr (FVRR), which are down more than 20% in price year-to-date, to deliver solid upside in the coming months. Let's discuss.
Thanks to COVID-19 pandemic-led remote lifestyles, the e-commerce industry has achieved steady growth, across a wide range of segments, including both necessities and luxuries. The industry is projected to have an impressive rebound despite retail sales decline to record lows recently due to high inflation. Because remote lifestyles are expected to persist for longer than originally anticipated, the industry should keep growing with the continuing efforts of e-commerce companies to satisfy changing consumer preferences.
Furthermore, acquisitions, agreements, and restructuring within the broader retail industry should contribute to the growth of the e-commerce segment. According to Statista, global retail e-commerce sales are estimated to reach $7.4 trillion by 2025.
Given this backdrop, Wall Street analysts expect fundamentally strong e-commerce stocks MercadoLibre, Inc. (MELI), Wayfair Inc. (W), Ozon Holdings PLC (OZON), and Fiverr International Ltd. (FVRR), which are down more than 20% in price year-to-date, to deliver significant gains in the coming months.
MercadoLibre, Inc. (MELI)
Headquartered in Buenos Aires, Argentina, MELI operates online commerce platforms in Latin America. It is the largest online commerce ecosystem in Latin America, serving as an integrated regional platform.
On Nov. 4, 2021, Pedro Arnt, CEO, MELI, commented, "We have once again reached new records in gross merchandise volume, payment volumes, and credit portfolio size, which demonstrates resilience and strength across all parts of our ecosystem."
MELI's net revenues have increased 66.5% year-over-year to $1.86 billion for the third quarter, ended Sept. 30, 2021. Its net income came in at $95.22 million, up 533.4% year-over-year. Also, its EPS was $1.92, up 585.7% year-over-year.
Analysts expect MELI's revenue and EPS to grow 34.6% and 180.3%, respectively, year-over-year to $9.36 billion and $8.94 for its fiscal 2022. The stock has declined 23.2% in price year-to-date to close Friday's trading session at $1,035.33. Wall Street analysts expect the stock to hit $1,700 in the near term, which indicates a potential 64.2% upside.
Wayfair Inc. (W)
Boston-based W engages in the e-commerce business in the United States and internationally. It provides approximately twenty-two million products for the home sector under various brands. Its sites include Wayfair, Joss & Main, AllModern, Birch Lane, and Perigold.
On Nov. 4, 2021, Niraj Shah, CEO, co-founder, and co-chairman, W, said, "Our long-term vision is in sharp focus coming out of the pandemic period. The initiatives required to realize it are in flight, even as we work through near-term macro challenges like supply chain congestion and related inflation. We are, as ever, focused on the long-term, balancing strong growth and profitability over the years, not quarters, and solidifying our position as the definitive destination for the home."
For the third quarter, ended Sept. 30, 2021, W's active customers came in at 29.21 million, up 1.5% year-over-year. Its other non-current assets were $40.4 million for the period ended Sept. 30, 2021, compared to $31.45 million, for the period ended Dec. 31, 2020. Furthermore, its total current liabilities came in at $2.03 billion, compared to $2.17 billion for the same period.
W's revenue is expected to be $15.22 billion in fiscal 2022, representing a 10.6% year-over-year rise. The company's EPS is also expected to increase by 12.9% per annum for the next five years. The stock has declined 25% in price year-to-date to close Friday's trading session at $142.57. Wall Street analysts expect the stock to hit $182.42 in the near term, which indicates a potential 28% upside.
Ozon Holdings PLC (OZON)
Based in Nicosia, Cyprus, OZON and its subsidiaries operate as internet retailers of multi-category consumer products to the general public, primarily in the Russian Federation.
On Feb. 2, 2022, Alexander Shulgin, CEO of OZON, said, "Several important milestones marked 2021: our buyer base grew by over 900 thousand users per month on average to more than 25 million; the number of sellers increased by over 60,000 to more than 90,000; and our warehouse capacity expanded to c.1 million square meters. Ozon successfully launched 3P logistics solutions serving more than 3,000 companies."
For the fourth quarter, ended Dec. 31, 2021, OZON's Gross Merchandise Value services increased more than 130% year-over-year and exceeded RUB 175 billion ($2.32 billion). The company's number of orders increased by more than 200% year-over-year and exceeded 90 million. Its active user base grew by more than 85% year-over-year and exceeded 25 million buyers, compared to 13.8 million, in the year-ago period.
For its fiscal year 2022, analysts expect OZON's revenue to be $3.94 billion, representing a 70.7% year-over-year rise. The stock has declined 31.6% in price year-to-date to close Friday's trading session at $20.26. Wall Street analysts expect the stock to hit $38.50 in the near term, which indicates a potential 90% upside.
Fiverr International Ltd. (FVRR)
Headquartered in Tel Aviv, Israel, FVRR operates an online marketplace worldwide. It also boasts skilled freelancers that offer digital services in more than 500 categories across nine verticals, including graphic design, digital marketing, programming, video, and animation.
On Nov.10, 2021, Ofer Katz, FVRR's President, and CFO, added, "Fiverr continues to deliver strong financial results amidst the still uncertain backdrop of the pandemic. The underlying strength and scale of our business, together with secular trends towards digital transformation, will drive long-term growth for the company."
FVRR's revenue came in at $74.32 million for the third quarter ended Sept. 30, 2021, up 42% year-over-year. The company's non-GAAP net income came in at $7.66 million, up 61.9% year-over-year, while its non-GAAP EPS came in at $0.19, up 58.3% year-over-year.
FVRR's revenue is expected to be $371.97 million, increasing at the rate of 26.2% in fiscal 2022. Its EPS is also estimated to increase by 123.5% per annum for the next five years. The stock surpassed EPS estimates in each of the four trailing quarters. It has lost 28.4% year-to-date to close Friday's trading session at $81.43. Wall Street analysts expect the stock to hit $146.29 in the near term, which indicates a potential 79.7% upside.
MELI shares were trading at $1,055.00 per share on Monday morning, up $19.67 (+1.90%). Year-to-date, MELI has declined -21.76%, versus a -5.38% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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