3 Trending E-Commerce Stocks For Your May 2022 Watch List
There’s no question that e-commerce stocks were one of the biggest winners in the stock market during the onset of the pandemic. But over the past six months, most of these stocks plummeted as investors worried about the slowdown in their growth in a post-pandemic world. And as consumers start to spend their money on brick-and-mortar stores and travel experiences, it’s natural that e-commerce spending will take a hit. Thus, such a trend could also be contributing to the downtrend in the shares of e-commerce companies.
What’s more, concerns about inflation and rate hikes have been weighing on sentiments in the broader stock market. Could it be a good idea to purchase financially sound companies with attractive valuations at such times? For instance, we only need to look at the likes of Shopify. Despite showing exceptional growth in 2021, Shopify stock has shed more than 80% from its all-time high level. While it may deter some investors from investing in these tech companies, others may be buying the dips.
Elsewhere, South Korean e-commerce giant Coupang (NYSE: CPNG) has already provided a glimpse of what’s to come earlier today. Its recent first-quarter earnings were impressive, to say the least. Its total revenues were a record $5.1 billion, up 22% year-over-year. Meanwhile, it also recorded the highest gross profit and gross profit margin in Coupang’s history. All in all, it may not be the worst idea to bank on the future of e-commerce stocks. If you share the same sentiment, here are some of the top e-commerce stocks to keep an eye on in the stock market today.
E-Commerce Stock To Watch In May 2022
First up, we have the global commerce company eBay. Through its Marketplace platforms, buyers and sellers could connect in more than 190 markets around the globe. Its technology empowers its customers and provides everyone with an opportunity to grow and thrive. No matter who or where they are, the ripple effect of its work creates waves of changes for customers and anyone that uses the company’s platform. Therefore, investors keeping an eye on the e-commerce industry would likely be paying attention to EBAY stock.
After all, eBay just came off a better-than-expected fiscal first-quarter in 2022. Despite the current macro headwinds, the company remains firm and its long-term strategy is still intact. The company posted revenue of $2.5 billion, down 6% compared to the prior year’s quarter but exceeding most analysts’ expectations. Meanwhile, its Non-GAAP earnings per share were $1.05, also exceeding expectations. Consequently, eBay reassured its investors that the company is focusing on the future with an eye toward sustainable growth.
On top of that, the company started the month of May with the launch of its third annual Up & Running Grants program. This is to provide support to the U.S. small businesses with the resources they need to scale, grow and thrive in the modern commerce era. eBay recognizes that small businesses are essentially the backbone of its platform. Thus, this program is part of the company’s ongoing commitment to empower them as it continues to find ways to make eBay their platform of choice. All things considered, there appear to be plenty of positives to go around. So, would you consider EBAY stock to be a top e-commerce stock to watch?
Shopify is a software giant that specializes in the e-commerce space. In detail, the company provides a cloud-based, multi-channel commerce platform for small and medium-sized businesses. Merchants leverage its software to run their business across all of their sales channels, including Web and mobile storefronts. Therefore, giving merchants a single view of their business and customers across all sales channels. For these reasons, Shopify has been the commerce platform of choice for many merchants in any environment.
Last Thursday, the company announced its first-quarter earnings. Shopify’s total revenue for the quarter improved to $1.2 billion, representing an increase of 22% year-over-year and a two-year compound annual growth rate of 60%. Not to mention, its Monthly Recurring Revenue also improved to $105.2 million, up 17% year-over-year. Admittedly, these figures may not be as exhilarating as the early stages of the pandemic. However, it does not change the fact that Shopify is still growing in the right direction.
Furthermore, the company also announced that it has reached an agreement to acquire Deliverr, Inc. For those unaware, this is a fulfillment technology company that provides simplicity and scale to millions of merchants. It also aims to remove the complexity of fragmented supply chain management. As such, Shopify will gain visibility and control of movement along the supply chain while empowering merchants to achieve fast delivery promises across channels. Given these encouraging developments, should investors be paying more attention to SHOP stock right now?
To sum up the list, it is only right to include one of the largest e-commerce companies in the world, Amazon. The company engages in the retail sale of consumer products and subscriptions around the world. For most parts, it sells merchandise and content purchased for resale from third-party sellers. That said, Amazon is now a tech conglomerate that often pushes its boundaries with a focus on innovation. For example, the company’s Amazon Web Services (AWS) is a comprehensive and broadly adopted cloud platform.
Although Amazon missed estimates in the recent quarter, AWS has been showing plenty of promise. The cloud computing segment grew 34% annually over the last 2 years, and 37% year-over-year in the first quarter. To say the least, it is the key component that is helping Amazon to weather the storm and move more of its workloads into the cloud. It is also noteworthy that Amazon is still the largest e-commerce company in the U.S. but has only penetrated approximately 13% of overall retail spending.
Besides that, Amazon introduced “Buy with Prime” in April. This new feature will allow U.S.-based Prime members to shop directly from merchants’ online stores. When shopping with Buy with Prime, checkout is simple and convenient. Prime members will use the payment and shipping information stored in their Amazon account and receive timely shipping and delivery notifications after an order is placed. Overall, there may still be reasons for optimism when it comes to Amazon. With that in mind, could this be an opportunity to invest in AMZN stock at its current valuation?