Amid the holiday season, e-commerce giants are continuously endeavoring to keep up with the ongoing trends and attract customers through the introduction of the latest innovations. This upsurge has resulted in significant growth prospects for the e-commerce industry.
Given this backdrop, it could be wise to invest in fundamentally strong e-commerce stocks Amazon.com, Inc. (AMZN), Walmart Inc. (WMT), and CarGurus, Inc. (CARG), winning the holiday shopping war.
Easy access to the internet, social media influence, and integration of generative AI have transformed the shopping landscape. More and more customers are shifting to online shopping platforms, seeking convenience and wider choices, and following social media trends this holiday season. As a consequence, e-commerce leaders are emphasizing more on their technological capabilities and advancements.
Further, with the robust economic growth and the holiday season around the corner, the National Retail Federation projects winter holiday spending to grow at 2.5% to 3.5% from the prior year, reaching between $979.5 billion and $989 billion in total in November and December.
Also, U.S. online retail sales are expected to reach around $1.20 trillion in 2024, projecting an estimated increase of $108 billion, or 9.8%, from the previous year's period. The economy's e-commerce market share is also expected to be 22.7% by year-end, which is higher than 21.6% at the end of 2023.
Further, changing consumer behaviors, advancing mobile technologies, advancements like voice-activated virtual assistants, AI-powered chatbots, digital assistants, and the adoption of 5G networks are reshaping the global e-commerce market. The market is projected to grow at a CAGR of 18.9%, resulting in a market volume of $83.26 trillion by 2030.
Considering the conducive industry trends, let’s delve deeper into the fundamentals of top e-commerce stocks such as AMZN, WMT, and CARG.
Amazon.com, Inc. (AMZN)
AMZN is engaged in the retail sale of consumer products, advertising, and subscription services through online and physical stores internationally. It operates through three segments: North America; International; and Amazon Web Services (AWS).
On December 9, AMZN and Intuit Inc. (INTU) announced a multi-year strategic partnership to empower millions of Amazon sellers to manage their finances, stay compliant, access capital, and grow their businesses. Intuit's AI-driven expert platform will allow millions of AMZN's sellers to discover and access Intuit's platform seamlessly, benefiting from powerful financial insights.
On December 4, AMZN’s AWS announced four new innovations for Amazon SageMaker AI to help its customers get started faster with popular publicly available models, maximize training efficiency, lower costs, and use their preferred tools to accelerate generative artificial intelligence (AI) model development.
For the third quarter that ended September 30, 2024, AMZN’s total net sales increased 11% from the prior-year quarter to $158.88 billion. Its operating income grew 55.6% from the year-ago value to $17.41 billion. The company’s net income and EPS amounted to $15.33 billion and $1.43, indicating increases of 55.2% and 52.1% from the previous year’s quarter, respectively.
Analysts expect AMZN’s revenue and EPS for the fourth quarter (ending December 2024) to increase 10.2% and 47.3% year-over-year to $187.24 billion and $1.47, respectively. Furthermore, the company surpassed the consensus EPS estimates in each of the trailing four quarters.
Shares of AMZN have surged 20.3% over the past six months and 54.3% over the past year to close the last trading session at $225.04.
AMZN’s robust growth prospects are reflected in its POWR Ratings. The stock has an overall rating of B, translating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has an A grade for Sentiment. It also has a B grade for Quality, Momentum, and Growth. Within the A-rated Internet industry, AMZN is ranked #14 among the 52 stocks.
Click here to access other AMZN ratings.
Walmart Inc. (WMT)
WMT engages globally in the operation of retail, wholesale, other units, and eCommerce. It operates in Walmart U.S.; Walmart International; and Sam's Club segments. It operates supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, and discount stores under the Walmart and Walmart Neighborhood Market brands.
On December 9, WMT announced more convenience, savings, speed, and ease for customers for the holiday season through reliable last-mile and amazing last-minute deals across its assortment. Customers can save time and money with WMT’s new deals on top gifts and newly extended shipping cutoff dates that offer an extra 48 hours to shop gifts for delivery.
On December 3, WMT completed the acquisition of VIZIO. The acquisition allows WMT to serve its customers in new ways and enhance their shopping journeys. It also offers new and differentiated ways for advertisers to connect with customers at scale and boost product discovery, helping brands achieve greater impact with Walmart Connect.
During the third quarter, which ended October 31, 2024, WMT’s total revenue increased by 5.5% year-over-year to $169.59 billion, and its operating income grew 8.2% from the year-ago value to $6.71 billion. Consolidated net income attributable to Walmart came in at $4.58 billion or $0.57 per common share, up 910.4% and 850% from the prior year’s quarter, respectively.
Street expects WMT’s revenue and EPS for the fourth quarter (ending January 2025) to increase 4% and 6.8% year-over-year to $178.74 billion and $0.64, respectively. Also, the company topped the consensus revenue and EPS estimates in all four trailing four quarters, which is impressive.
WMT’s shares have gained 41.2% over the past six months and 87.6% over the past year to close the last trading session at $94.55.
WMT’s sound fundamentals 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 stock has an A grade for Sentiment and Stability. WMT has a B for Momentum. Within the A-rated Grocery/Big Box Retailers industry, WMT is ranked #15 out of 36 stocks.
In addition to the POWR Ratings we’ve stated above, we also have WMT ratings for Quality, Growth, and Value. Get all WMT ratings here.
CarGurus, Inc. (CARG)
CARG operates an online automotive platform for buying and selling vehicles internationally. The company operates in two segments: U.S. Marketplace and Digital Wholesale. It offers an online automotive marketplace where customers can search for new and used car listings from its dealers and sell their cars to dealers.
On November 4, 2024, CARG unveiled a new digital retail solution to power more seamless and efficient connections between dealers and purchase-ready shoppers in Canada. The Digital Deal solution enables consumers to complete most of the car buying process online. It connects dealers with ready-to-buy shoppers and simplifies the sales process.
During the third quarter that ended September 30, 2024, CARG’s total revenue increased 5.4% year-over-year to $231.36 million, while its non-GAAP gross profit rose 13.4% year-over-year to $192.40 million. Non-GAAP net income attributable to common stockholders of $47.06 million or $0.45 per share reflects growth of 22.8% and 32.4% from the prior year’s quarter, respectively.
In addition, the company’s non-GAAP free cash flow rose 139.9% from the year-ago value to $41.30 million.
According to the company's fourth-quarter guidance, CARG expects total revenue between $219 million and $239 million. Its non-GAAP consolidated adjusted EBITDA is projected at $72 million to $80 million and its non-GAAP EPS is set at $0.50 - $0.55.
For the full year 2024, the company projects total revenue of $885 million to $905 million and marketplace revenue of $794 million to $799 million. CARG’s non-GAAP consolidated adjusted EBITDA is expected to range from $243 million to $251 million. And its non-GAAP EPS will be $1.67 to $1.73.
The consensus EPS estimate of $0.51 for the fourth quarter of 2024 reflects a 46.9% improvement year-over-year. And the company's revenue is estimated to grow 3.6% year-over-year to $231.12 million for the same period. Moreover, the company surpassed the consensus EPS estimates in each of the trailing four quarters.
CARG’s stock has soared 46.7% over the past six months and 73% over the past year to close the last trading session at $38.11.
CARG’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.
CARG has an A grade for Growth and a B grade for Quality. It is ranked #7 among the 52 stocks in the A-rated Internet industry.
Click here to access additional CARG ratings for Sentiment, Value, Stability, and Momentum.
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AMZN shares were trading at $229.96 per share on Wednesday afternoon, up $4.92 (+2.19%). Year-to-date, AMZN has gained 51.35%, versus a 29.07% 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 Winning the Holiday Shopping War StockNews.com
