Niche e-commerce companies are carving out unique spaces in the online retail landscape by catering to specific customer needs and interests. This approach helps them build loyal customer bases and differentiate themselves in a competitive market.
Thus, to capitalize on this trend, you might consider investing in three quality niche e-commerce stocks: BARK, Inc. (BARK), Murphy USA Inc. (MUSA), and Upbound Group, Inc. (UPBD), which are positioned for long-term growth.
In today’s world, understanding customer preferences and purchasing behavior and recommending tailored products creates a more engaging and satisfying experience for shoppers. Leveraging data-driven insights to personalize the shopping experience is a key strategy that niche e-commerce players employ.
Online retail shopping currently accounts for 20.1% of the world’s retail sales. This equals more than $6.3 trillion annually. Further, the e-commerce industry is set to mark $8 trillion by 2027, rising to 22.6% of retail purchases to take place online.
The global specialty retailers market is projected to reach $42.7 billion by 2031, growing at a CAGR of 4%. Despite their smaller scale, niche e-commerce companies often achieve impressive profitability by focusing on high-margin products and efficient operations.
So, let us dive deep into the fundamentals of three Specialty Retailer stocks, starting with #3.
Stock #3: BARK, Inc. (BARK)
BARK is a dog-centric company that is a vertically integrated, omnichannel brand serving dogs across two key categories: toys & accessories and consumables. The company operates in two segments: Direct to Consumer and Commerce.
On December 5, 2024, BARK announced the expansion of BARK Air, the first air travel service for dogs and their owners, in collaboration with Air Wisconsin. In this collaboration, BARK plans to trial larger flights with at least double the capacity and fares under $1,000, offering convenient travel between NYC and Miami/Fort Lauderdale. This expansion enhances BARK’s unique offerings and strengthens its position in the growing pet-friendly travel market.
For the second quarter of 2025, which ended on December 31, BARK's revenue amounted to $126.11 million, up 2.5% year-over-year, while the gross profit stood at $76.11 million, reflecting a marginal increase from the prior-year quarter.
Its adjusted EBITDA increased 247.2% year-over-year, amounting to $3.49 million. The company’s adjusted net income stood at $1.26 million compared to the prior-year quarter’s loss of $1.44 million, while its EPS came in at $0.01 versus a loss of $0.01 per share last year.
The company has updated its fiscal year 2025 financial guidance, where its total revenue projection is in the range of $490 million to $500 million. Additionally, its adjusted EBITDA guidance is expected to be in the range of $1 million to $5 million.
Street expects BARK’s revenue for the fiscal fourth quarter (ending March 2025) to increase 5.9% year-over-year to $128.59 million. Moreover, its EPS estimate is expected to be $0.01 for the same period. In addition, it surpassed the consensus revenue estimates in three of the trailing four quarters, which is promising.
Shares of BARK have surged 115.3% over the past year and 75.5% over the past nine months to close the last trading session at $1.93.
BARK’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
BARK has a B grade for Growth and Quality. It is ranked #13 out of 38 stocks in the Specialty Retailers industry. Click here to see the additional ratings for BARK (Value, Momentum, Stability, and Sentiment).
Stock #2: Murphy USA Inc. (MUSA)
MUSA engages in the marketing of retail motor fuel products and convenience merchandise. The company operates retail stores under the brand names Murphy USA, Murphy Express, and QuickChek, including non-fuel convenience stores.
On December 2, demonstrating its commitment to returning value to shareholders, the company paid a quarterly dividend of $0.48 per share. MUSA pays an annual dividend of $1.92, which translates to a yield of 0.40% at the current share price. Its four-year average dividend yield is 0.45%. Moreover, its dividend payouts have increased at a CAGR of 19.8% over the past three years.
In the fiscal third quarter that ended on September 30, 2024, MUSA’s total operating revenues were reported to be $5.23 million. The company reported net income of $149.20 million, while its EPS came in at $7.20.
Analysts expect MUSA’s revenue for the first quarter (ending March 2025) to increase 3.7% year-over-year to $5.02 billion, while its EPS for the same period is expected to grow 59.1% from the prior year to $4.96.
The stock has gained 33.2% over the past year and 13.3% over the past nine months to close the last trading session at $476.92.
It’s no surprise that MUSA has an overall rating of B, equating to a Buy in our POWR Ratings system. It has a B grade for Value. Out of 38 stocks in the same industry, MUSA is ranked #12.
Beyond what is stated above, we’ve also rated MUSA for Growth, Momentum, Stability, Sentiment, and Quality. Get all MUSA’s ratings here.
Stock #1: Upbound Group, Inc. (UPBD)
UPBD is a lease-to-own provider of household durable goods to customers in the United States, Puerto Rico, and Mexico. The company operates through four segments: Rent-A-Center; Acima; Mexico; and Franchising.
On December 12, UPBD announced the acquisition of Brigit, a leading financial health technology company, for $460 million, consisting of cash and shares of UPBD common stock. This acquisition will help UPBD expand its innovative and flexible financial solutions offerings and create a financial solutions platform for the financially underserved that meets the consumer.
On November 21, UPBD announced a collaboration with Google Cloud to deliver advanced AI solutions to improve customer experience and expand customer offerings across Upbound’s Acima Leasing® and Rent-A-Center® lines of business. This collaboration will enhance the omnichannel experience and broaden the offerings by integrating AI technologies.
During the fiscal third quarter that ended on September 30, 2024, UPBD’s total revenues increased 9.2% year-over-year, amounting to $1.07 billion. Its adjusted EBITDA amounted to $116.86 million, increasing 10.3% year-over-year.
Its non-GAAP adjusted operating profit improved by 12.7% from the prior year’s value to $98.21 million. In addition, the company’s non-GAAP adjusted net earnings rose 18.4% from the year-ago value to $53.33 million, while its non-GAAP adjusted EPS stood at $0.95, up 20.3% year-over-year. Also, UPBD’s free cash flow grew 39.6% year-over-year to $88.26 million.
According to the company’s updated fiscal year 2024 guidance, UPBD expects total revenue to be between $4.20 billion and $4.30 billion. Its non-GAAP EPS is expected to lie between $3.75-$3.90. The company’s free cash flow is set in the range of $100 million to $130 million.
The consensus revenue estimate of $1.06 billion for the fiscal fourth quarter (ended December 2024) represents a 3.8% increase year-over-year. The consensus EPS estimate of $1.02 for the ongoing quarter indicates a 26.3% improvement year-over-year. The company has an excellent surprise history; it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.
UPBD’s shares have surged 9.2% over the past three months to close the last trading session at $29.57.
UPBD’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
It also has an A grade for Growth and a B for Quality. Within the Specialty Retailers industry, it is ranked #2. Click here to see UPBD’s ratings for Value, Momentum, Stability, and Sentiment.
What To Do Next?
Get your hands on this special report with 3 low priced companies with tremendous upside potential even in today’s volatile markets:
3 Stocks to DOUBLE This Year >
MUSA shares were trading at $482.63 per share on Monday afternoon, up $5.71 (+1.20%). Year-to-date, MUSA has declined -3.81%, versus a 1.76% rise in the benchmark S&P 500 index during the same period.
About the Author: ShreyaRathi
