EBay & 4 Great E-Commerce Stocks To Buy For Holiday Season

In the e-Commerce space, I think the most loved stock is that of Amazon.com Inc. (AMZN - Analyst Report) and for good reason too. It has reported a 113.07% year-to-date stock growth. In addition, its strongest season is knocking on the door!

Amid all the media attention that Amazon is busy getting, there is another stock which, we strongly feel will gain from the upcoming holiday season — eBay Inc. (EBAY - Analyst Report).

eBay, with a Zacks Rank #2, is one of the largest online retailers in the world. In the last-reported quarter, the company beat the Zacks Consensus by 2 cents as the active buyer base rose 5% year over year to 159 million. Gross merchandise volume (GMV) rose 6%. Free cash flow was a healthy $462 million in the quarter.

What’s More?

It raised the full-year EPS to $1.80–$1.82 from $1.72–$1.77.

And this holiday season it’s quite evident that eBay wants to become more of an end retailer and less of a search-driven source for second-hand goods. The two-decade-old company is rolling out a string of marketing programs and promotional deals to help shoppers and sellers alike.

The San Jose, CA-based company has already rolled out its Wish Bigger campaign, with a distinct "holiday hub" website for all seasonal shopping, and a "heatmap" that trails the most wanted items in different regions.

The company intends to let customers decide on hot Black Friday deals for this campaign. eBay will allow three customers to crowdsource the deals they want the most “while skipping the chaos – but not the savings – of Black Friday.”

Ebay-wish-bigger.com, set to become live from Thanksgiving Day, will let shoppers vote to “break open and unlock a series of incredible deals.” The one that gets the maximum votes within an hour will be released to buyers in limited quantities.

On top of that, it will offer “deep discounts” on the most wanted items on eBay.com/deals, launching every hour around the clock from Thanksgiving Day through Cyber Monday.

The company’s earnings estimates for 2015 have moved up 4% to $1.56, over the past 30 days. The giant online retailer surpassed earnings estimates in all the four trailing quarters with an average beat of 8.85%. Also, the 7.1% long-term earnings growth rate underscores the growth potential.

So is there more to eBay than PayPal after all?

And what makes eBay more desirable? The predictions regarding this years holiday season.

HolidaySeason This Year

This holiday season, deals will be within your grasp, well, quite literally!

According to Adobe’s new holiday shopping forecasts, the majority of holiday shoppers will tune in to their mobile devices to browse retail sites this shopping season — accounting for approximately a third of online sales.

Online sales, as Adobe predicts, will go up 11% from the last holiday season, translating to a good $83 billion.

Another study by Forrester Research predicts that Americans will shell out $95.5 billion online this holiday season. The research firm anticipates online sales to go up 11% in November and December. Though that’s slightly slower than last year’s 12% clip, it is still about three times the growth of overall retail for the holidays.

Things will be a bit different in other respects too. Cyber Monday is set to bring in a record $3 billion this year, according to Adobe. Based on tracking comments social media, Forrester reports that Cyber Monday will be hotter than Black Friday.

Why? Because as Fortune puts it, “a feeling similar to 'Black Friday fatigue' has yet to creep in for Cyber Monday.”

However, Forrester is of the opinion that email will remain the most efficient marketing tool for retailers. This is extremely beneficial for stores like Target that focus on loyalty programs.

That said, it should be kept in mind that online sales now generate about 10% of all retail sales, per the Forrester report. This increases to 15% in the holiday season, as stressed shoppers look for deals and ways to make shopping more convenient.

In short, the most lucrative time of the year for e-Commerce stocks is right around the corner!  

We bring to you four more names that could be big winners this season. So get ready to shop!

Our Picks

We have identified 4 more e-Commerce stocks based on Zacks Rank #1 (Strong Buy) or 2 (Buy) and expected long-term earnings per share growth rate of 7% or more. A favorable rank indicates positive estimate revisions by analysts who are optimistic on the future performance of a company.

First up is- obviously, Amazon.com, whichis looking to increase its revenues by as much as 25% in the holiday quarter. The giant e-tailer kicked off the Black Friday deals three weeks ahead of the crucial shopping season with the launch of a dedicated Black Friday Deals Store. The company is offering huge discounts on a wide array of products ranging from TVs, smartphones, cameras, projectors and toys to clothes.

The company also doubled the number of limited-time ‘lightning deals’ to 30,000 on its e-Commerce platform and offers Prime members access to these deals 30 minutes earlier. Notably, the 7-week holiday sales already started on Monday and will run through Dec 22.

Moreover, Amazon is expected to be the clear winner this holiday season primarily on the back of online sales.

This Zacks Rank #2 stock’s earnings per share estimates for 2015 moved up a whopping 18% to $1.81 over the past 30 days. The company delivered an average beat of a massive 147.97% over the trailing four quarters, with a positive surprise in each. Also, its 35.6% long-term earnings growth rate accentuate its potential.

Stamps.com (STMP - Snapshot Report) provides easy, convenient and cost-effective Internet-based services for mailing or shipping letters, packages or parcels anywhere in the United States at anytime. This Zacks Rank #1 company delivered a robust third-quarter performance and raised the full-year outlook.

The company’s earnings estimates for 2015 have moved up 16% to $3.11 per share, over the past 30 days. The company delivered an average beat of 41.43% over the trailing four quarters, with a positive surprise in each. Also, its 20% long-term earnings growth rate highlights its potential.

Travelport Worldwide Ltd. (TVPT - Snapshot Report) is a travel commerce platform providing distribution, technology, payment and other solutions for the global travel and tourism industry.

The Zacks Rank #1 stock witnessed 13% upward movement in the earnings estimates for 2015 to 95 cents per share, over the past 30 days. Its 10% long-term earnings growth rate underlines its potential.

You may add also some sparkle to the portfolio this holiday season with Blue Nile Inc. (NILE - Snapshot Report), a leading online retailer of diamonds and fine jewelry.

The company’s earnings estimates for 2015 have move 2% upward to 91 cents per share, over the past 30 days. The company delivered an average beat of 7.42% over the trailing four quarters. Also, its 17.83% long-term earnings growth rate underscores its potential.

We expect that the above e-Commerce stocks will have a Merry Christmas. Hope you have one too with these stocks!

 

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