E-Commerce is the next big thing. So, let’s have a look at the potential buys in the E-Commerce sector.
E-Commerce has evolved significantly over the past two decades. Amazon has been the leading e-commerce platform that has shipped millions of products in the past 25 years.
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The ongoing digitalization of the world has fueled the E-commerce sector and every single day, more people are dealing with their business online. In 2019, around 1.92 billion goods and services were purchased online. Whereas, as per an estimate, online retail sales have jumped to $3.5 trillion in 2020 worldwide.
The significance of e-commerce has increased, especially during the COVID-19 period. The boom in online sales has turned more people towards e-commerce business. In the coming years, the e-commerce industry will experience an unmatching period.
So, let’s have a look at the top 3 E-commerce stocks to buy.
One of the leading E-commerce platforms in the world, Shopify (SHOP) has had a terrific year. Shopify helps all kinds of businesses to run their e-commerce operations including brands like Staples, Heineken, and Heinz, etc.
The company has been unprecedented, with a record growth of 71% in new stores in Q2 2020. While a record number of merchants were added to Shopify in Q3 2020.
Shopify has recorded $767 million in revenue during Q3 compared to $390 million in Q3 2019. The company expects the bullish momentum to continue with the E-commerce boom. Shopify is having a record time across the board and the pandemic impact is pushing things to the next level.
However, having such a great time, Shopify has still a long way to go. The international sales of the company represent less than 26% of its top-line revenue in 2019. This means that Shopify (SHOP) has much more upside potential and its E-commerce operating system has more opportunities in the growing market across the globe.
Godaddy (GDDY) is the largest global service platform for online sellers. In the past two years, the company has recorded significant growth. Since March 11, 2020, GDDY shares have soared up to 46%.
The online services platform has shown a lot of promise. The company provides small business services which include web development, email management, web security, and many more.
Also, Godaddy has revealed that it plans to acquire a California payment servicer at approximately $365 million. According to the company, this acquisition will help them to record $150 million more in bookings in 2023.
Godaddy is also the leading global domain name registration platform with a market share of 22%. This is almost three times more than its biggest competitor in the market. The company has a strong grip over its sector and benefits from scale economics in a commodity industry.
So, with all this potential, Godaddy (GDDY) is a suitable investment under $100 in the E-commerce sector.
The U.S.-based online pet food retailer, Chewy (CHWY) is another interesting E-commerce platform with significant upside potential. Chewy is one of the most trusted online pet food platforms for pet lovers. CHWY stock has an average trading volume of 4.2 million which shows investors interest in pet stock.
As of Dec. 14, the share price of Chewy was up by 30% from the prior month alone. The pandemic impact has fueled Chewy’s sales over the past nine months. In the third quarter, the company posted net sales of $1.78 billion, a whopping 54% increase from last year. The company has over 17.8 million active customers as of Q3. This shows a 40% rise in customers from the same period in 2019.
The third quarter outcomes are impressive for the company considering the long-term prospect. Chewy has also updated Q4’s outlook with expected net sales of $1.94 billion to $1.96 billion. This is almost 43% to 45% incline year-over-year.
Moreover, back in October 2020, the online pet retailer launched a telehealth service for pets. The telehealth service has generated over $500 million in revenue so far and that too, on top of its pharmacy business. So, Chewy (CHWY) looks exciting with its potential growth.