The increasing internet penetration and changing customer preference has boosted the e-commerce market demand worldwide. Also, the rapid technological advancements, increasing online shopping, security advancements, and AI are propelling the market growth.
Therefore, given the industry’s robust prospects, investors could consider investing in quality e-commerce stocks eBay Inc. (EBAY), Liquidity Services, Inc. (LQDT), and Natural Health Trends Corp. (NHTC) for potential gains.
Improved accessibility to the internet, convenience, and changing consumer preference has rapidly transformed the e-commerce market. The number of users in the E-commerce market in the US have grown each year and has been projected to grow continuously from 2024 to 2029, resulting in total 60 million users, reflecting a 21.9% rise.
Recently, the Census Bureau of the Department of Commerce reported U.S. retail e-commerce sales of $291.60 billion for the second quarter 2024, indicating an increase of 1.3% from the first quarter. The second quarter of 2024's e-commerce estimate grew by 6.7% from the prior year’s quarter. The e-commerce sales from the second quarter accounted for 16% of total sales.
With over 33% of the worldwide population engaging in online shopping, the global e-commerce industry is projected to value $6.3 trillion in 2024, up 8.8% from 2023. The market is further expected to hit the $8 trillion mark by 2027, growing at a CAGR of 7.8%.
The growing need for voice recognition and artificial reality technologies to improve customer experience, internet users' and digital buyers' rapid growth are emerging as the key contributors to the e-commerce market demand.
Given the industry’s robust outlook, investing in fundamentally strong e-commerce stocks EBAY, LQDT, and NHTC could be wise now.
Let’s discuss the fundamentals of these stocks in detail:
eBay Inc. (EBAY)
EBAY operates marketplace platforms that connect buyers and sellers worldwide. The company's marketplace platform consist its online marketplace at ebay.com, off-platform businesses, and the eBay suite of mobile apps.
On July 10, EBAY unveiled Business Cash Advance, a new eBay Seller Capital revenue-based financing product created by Liberis. Business Cash Advance is aimed at supporting eBay sellers at every business stage by providing eligible U.S. eBay sellers up to $1 million in working capital in less than 24 hours.
On April 10, EBAY and Collectors, parent company of PSA, signed a definitive agreements to enter into a series of transactions including a commercial agreement, the sale of Goldin from Collectors to eBay, and the sale of the eBay vault from eBay to PSA. The transaction support more streamlined buying, selling, grading, and storage experiences.
During the second quarter that ended June 30, 2024, EBAY’s net revenues increased 1.3% year-over-year to $2.57 billion, while its income from operations grew 6% from the year-ago value to $549 million. The company’s non-GAAP net income from continuing operations of $602 million and $1.18 per share, up 8.5% and 14.6% over the prior year’s quarter, respectively.
According to the company’s third quarter 2024 guidance, EBAY expects its revenue between $2.50 billion and $2.56 billion. Its non-GAAP EPS is expected to be $1.15 - $1.20.
Analysts expect EBAY’s revenue for the third quarter (ending September 2024) to increase 1.7% year-over-year to $2.54 billion and its EPS for the ongoing quarter is expected to grow 14.5% year-over-year to $1.18. Furthermore, the company has topped the consensus revenue and EPS estimates in each of the trailing four quarters.
Shares of EBAY have gained 33.3% over the past six months and 36.4% over the past year to close the last trading session at $59.02.
EBAY’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
EBAY has an A grade for Quality. It also has a B grade for Momentum. It is ranked #18 out of 51 stocks in the B-rated Internet industry.
To check other POWR Ratings of EBAY for Value, Growth, Stability, and Sentiment, click here.
Liquidity Services, Inc. (LQDT)
LQDT provides e-commerce marketplaces, self-directed auction listing tools, and value-added services internationally. The company operates in four segments: GovDeals; Retail Supply Chain Group; Capital Assets Group; and Machinio.
On August 5, LQDT partnered with Tiger Group, a major asset valuation, advisory and disposition services provider, to sell energy equipment and related assets on behalf of national energy services firm El Dorado Gas & Oil, Inc as part of a court-ordered online auctions related to the organization’s bankruptcy.
On July 30, LQDT relocated and expanded its Indianapolis operation, moving its reverse logistics warehouse in Plainfield, Indiana, to a larger 203,840 sq ft facility situated in Brownsburg, Indiana. This new facility allows more excess inventory from retailers, enhances the customer experience for liquidation resellers and customers, and reaffirms its commitment to sustainability.
During the third quarter that ended June 30, 2024, LQDT's total revenue increased 15.9% year-over-year to $93.61 million and its income from operations was $7.89 million. The company’s non-GAAP adjusted net income and non-GAAP adjusted EPS came in at $9.49 million and $0.30, indicating growth of 7.8% and 7.1% year-over-year, respectively.
In addition, the company’s non-GAAP adjusted EBITDA rose 10.3% from the prior year’s quarter to $14.71 million.
Analysts expect LQDT’s revenue and EPS for the fourth quarter (ending September 2024) to increase 16.4% and 7.7% year-over-year to $93.05 million and $0.28, respectively. Moreover, the company surpassed the consensus EPS estimates in three of the trailing four quarters.
Over the past six months, the stock has surged 26.1% and 18.5% over the past year to close the last trading session at $21.57.
LQDT’s POWR Ratings reflect its robust outlook. The stock has an overall rating of A, translating to a Strong Buy in our proprietary rating system.
LQDT has an A grade for Quality and Sentiment and a B grade for Growth. It is ranked #2 among 26 stocks within the Internet - Services industry.
To see the other ratings of LQDT for Value, Stability, and Momentum, click here.
Natural Health Trends Corp. (NHTC)
Headquartered in Tsim Sha Tsui, Hong Kong, NHTC is a direct-selling and e-commerce company which provides personal care, wellness, and lifestyle products under its NHT Global brand. It offers wellness products, like liquid, encapsulated, tableted and powder dietary and nutritional supplements, vitamins, and minerals, and herbal products comprising herbal supplements.
In terms of trailing-12-month EV/Sales, NHTC is trading at 0.76x, 58.8% lower than the industry average of 1.84x. Likewise, the stock’s trailing-12-month Price/Sales multiple of 1.81 is 32.8% lower than the industry average of 1.36. Also, its trailing-12-month Price/Book of 2.09x is 18.8% lower than the industry average of 2.58x.
For the second quarter that ended June 30, 2024, NHTC reported net sales of $10.47 million, and its gross profit was $7.78 million. The company’s net income came in at $173 thousand and $0.02 per common share, against net loss of $219 thousand and $0.02 per common share during prior year’s quarter.
Furthermore, the company’s cash and cash equivalents and total assets stood at $15.58 million and $61.49 million as of June 30, 2024.
Over the past six months, NHTC’s stock has surged 12.9% and 33.7% over the past year to close the last trading session at $6.89.
NHTC’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall grade of B, translating to a Buy in our proprietary rating system.
NHTC has a B grade for Growth, Stability, and Sentiment. It is ranked #3 among the 10 stocks within the A-rated Medical – Consumer Goods industry.
To see the other ratings of NHTC for Momentum, Quality, and Value, click here.
What To Do Next?
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EBAY shares were trading at $58.69 per share on Friday afternoon, down $0.33 (-0.56%). Year-to-date, EBAY has gained 35.97%, versus a 18.67% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
3 E-Commerce Stocks to Buy as Online Shopping Thrives StockNews.com
