Are These Top E-Commerce Stocks On Your Watchlist In November?
It is no surprise that e-commerce stocks are doing great in the stock market right now. With people staying at home, the industry has seen a tremendous increase in active buyers. The added convenience of online shopping presents an alternative that most consumers are likely to depend on even after the pandemic is over. In light of this, the e-commerce industry has been steadily increasing its market share for the majority of 2020. That is likely why most of the top e-commerce stocks to watch continue to see new highs.
Companies like Best Buy (BBY Stock Report) and Target (TGT Stock Report) have made the most of the current situation. By reorganizing their business models towards e-commerce, they have weathered the worst of this pandemic. Despite the impressive rise of e-commerce even before the pandemic, will Q4 bring about more returns? With Black Friday sales around the corner, many e-commerce companies are looking to increase their sales. Let’s take a look at these top e-commerce stocks to watch in November before Black Friday.
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Top E-Commerce Stocks To Watch In November: Walmart Inc.
The first stock on this list is Walmart Inc. (WMT Stock Report). Walmart is one of the world’s largest retailers and naturally many investors would be watching it. This retail giant is most well-known for its hypermarkets, discount department stores, and grocery stores. It is headquartered in Arkansas and has come a long way since being founded in 1962. When Walmart faced the brunt of the pandemic, it did not do so lying down. The company quickly shifted its attention towards e-commerce which has since paid off.
In recent news, Walmart launched its own subscription service in the form of Walmart+. For $98 a year or $12.95 per month, subscribers get access to free delivery on groceries, discounted gas prices, and faster checkout at stores. This was seen as a challenge to Amazon’s (AMZN Stock Report) subscription service Amazon Prime as it offers similar services. Furthermore, the company recently turned four stores into “e-commerce laboratories”. This is likely part of the company’s attempts to fortify its e-commerce facilities by blending the brick-and-mortar and digital sides of its business. Ultimately, through efforts from its retail and tech staff the company aims to provide a better experience for customers.
This is a good move on Walmart’s end as e-commerce sales nearly doubled this fiscal Q2. However, after the e-commerce lab announcement on October 29, WMT stocks declined. This is likely due to investors being cautious as to whether or not the change would affect the share price. Considering that it is shutting down four stores, this could reduce sales as consumers who would usually buy from those stores. Regardless, Walmart is still a top e-commerce stock to watch as the company has accommodated the new norm very well and shows no signs of slowing.
Top E-Commerce Stocks To Watch In November: Pinduoduo Inc
The next stock on this list is Pinduoduo Inc. (PDD Stock Report). Pinduoduo is a Chinese e-commerce company that combines social networking with group shopping. It is undoubtedly one of the most successful IPOs in recent years. Since its market debut in 2018, its share price has more than quadrupled. This is likely thanks to its promising business performance paired with growing investor interest in the rapidly growing e-commerce industry in China. After the recent lows in early October, PDD stocks have increased by about 27% in the past month. The Shanghai-based company runs one of the largest e-commerce platforms in China by gross merchandise volume. It is often compared to the likes of Alibaba Group (BABA Stock Report) and JD.com (JD Stock Report).
For fiscal Q2 2020, Pinduoduo saw its revenue increase by 67%, up to $1.72 billion compared to a year earlier. The company reported a gross merchandise volume increase of 79% and ended the quarter with 568.8 million average monthly active users, up by 55% compared to a year earlier. The company also saw active buyers increase by 41% to 683.2 million in its latest quarter.
Despite the impressive performance of Pinduoduo this year. The company is still in the midst of pursuing strategies poised towards longstanding growth. This is after considering the potential of China’s online shopping industry due to overall economic expansion and higher penetration of online shopping. With that in mind, will PDD stocks be a top e-commerce stock for you to watch in the stock market?
Top E-Commerce Stocks To Watch In November: Shopify Inc
The last stock on the list is Shopify Inc. (SHOP Stock Report). The Canadian multinational e-commerce company is a proprietary platform for online stocks and retail point-of-sale systems. It announced a “first-of-its-kind commerce partnership with TikTok on October 29th. Through this deal, Shopify merchants will be able to create, run, and optimize their TikTok marketing campaigns. This presents mid to small-sized businesses with an opportunity as TikTok has more than 100 million users in the U.S. alone.
Shopify reported its Q3 results which beat expectations with strong growth momentum and accelerating earnings. The stock is seeing immense returns in 2020 and is up by 139% year-to-date. It is clearly gaining momentum as a market-leading e-commerce stock. The company also delivered positive earnings per share of $1.54 compared to an estimated quarterly loss of $0.15. It produced $767 million in revenue which was $115 million above expectations and is up 97% year-over-year. The excellent performance of Shopify in 2020 so far is likely because of new merchants joining the platform. As brick-and-mortar stores took a big hit due to coronavirus, merchants rushed to Shopify to set up e-commerce services. This is undeniably the driving force for the company’s growth via monthly revenue and gross merchandise volume.
A key attraction of Shopify’s business model is that merchants entering the platform out of desperation are incentivized to the stick with the company’s ecosystem. This in turn becomes a long-term agreement producing recurring revenues. The recurring revenues then scale over time as the businesses thrive. This makes itincreasingly harder for merchants to leave and find alternative solutions. Essentially, Shopify is still in the early stages of its earnings growth and still has room to grow as the pandemic drags on. As the company still has an edge over its competitors, will SHOP stocks be a top e-commerce to watch?