4 E-Commerce Stocks to Buy on Robust Online Retail Sales
In This Article:
The retail sector has put up a solid fight amid the ongoing inflation pressures, thanks to robust demand for goods. This has seen sales growing steadily over the months, and the overall scenario looks far better than a year ago.
The Commerce Department said earlier this week that retail sales rose in July, driven by solid online sales. E-commerce has been a key player in driving overall retail sales and is projected to play a bigger role in the coming months. Given this situation, retail stocks with a strong online presence, such as Amazon.com, Inc. AMZN, Travelzoo TZOO, JD.com, Inc. JD and Rover Group, Inc. ROVR, are likely to benefit in the near term.
E-Commerce Driving Retail Sales
Retail sales rose 0.7% in July to hit $696.4 billion after increasing 0.3% in June, the Commerce Department said on Aug 15. Experts noted that the promotional offers and discounts presented during Amazon Prime Day, which took place in July, probably contributed to an increase in online consumer spending.
According to the report, the solid jump in July was driven by a 1.9% rise in online sales. E-commerce has become a preferred choice for millions of Americans over the past three years or since the COVID-19 outbreak.
Consumers realized the ease and convenience of shopping online during the peak of the pandemic. E-commerce, thus, was also responsible for saving the retail sector from total collapse during that time.
This saw online sales hitting the $1 trillion mark for the first time in 2022, and this year's figures are expected to grow further. According to the 2023 US Online Retail Report by FTI Consulting, online retail sales are projected to exceed $1.1 trillion in 2023, reflecting a 10% rise from the previous year.
This expansion is in line with the continuous upward trend of the e-commerce sector in recent times. Forecasts have indicated that e-commerce sales in the United States are expected to hit $1.6 trillion by 2027.
Our Choices
Given this scenario, it would be wise to invest in these four e-commerce stocks. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Amazon.com, Inc. is one of the largest e-commerce providers, with sprawling operations in North America and across the globe. AMZN’s online retail business revolves around the Prime program well-supported by the company’s massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish its footprint in the physical grocery supermarket space.
Amazon.com’sexpected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 38.5% over the past 60 days. AMZN presently sports a Zacks Rank #1.
Travelzoo is an Internet media company. TZOO engages in the provision of information to subscribers and website users about travel, entertainment and local deals available from companies. Travelzoo’s operating segment consists of Asia Pacific, Europe and North America.
Travelzoo’s expected earnings growth rate for the current year is 35.9%. The Zacks Consensus Estimate for current-year earnings has improved 2.9% over the past 60 days. TZOO presently carries a Zacks Rank #1.
JD.com, Inc. operates as an online direct sales company in China. JD, through its website www.jd.com and mobile applications, offers a selection of authentic products.
JD.com’s expected earnings growth rate for the current year is 13.2%. The Zacks Consensus Estimate for current-year earnings has improved 4.7% over the past 60 days. JD currently carries a Zacks Rank #2.
Rover Group, Inc. provides an online marketplace for pet care. ROVR connects pet parents with pet providers who offer overnight services, including boarding and in-home pet sitting, as well as daytime services, including doggy daycare, dog walking, drop-in visits and grooming.
Rover Group’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 200% over the past 60 days. ROVR currently carries a Zacks Rank #1.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
JD.com, Inc. (JD) : Free Stock Analysis Report
Travelzoo (TZOO) : Free Stock Analysis Report
Rover Group, Inc. (ROVR) : Free Stock Analysis Report