Five US e-commerce stocks to watch ahead of holiday season

Highlights:

• com, Inc. (NASDAQ: AMZN) noted a seven per cent jump in its Q2 FY22 sales.
• eBay Inc. (NASDAQ: EBAY) experienced a nine per cent drop in its second-quarter revenue.
• Shopify Inc. (NYSE: SHOP) will report its latest quarterly earnings results on October 27.

The e-commerce sector is a major part of the retail industry which comprises some of the biggest companies in the market. 

Some of the major names from the sector include Amazon.com, Inc. (NASDAQ: AMZN), Etsy, Inc. (NASDAQ: ETSY), eBay Inc. (NASDAQ: EBAY), Chewy, Inc. (NYSE: CHWY), and Shopify Inc. (NYSE: SHOP). 

The demand of the e-commerce services had increased during the COVID-19 pandemic as lockdowns were imposed and people were discouraged to visit retail stores.  

With the economy reopening, the sector seems to be witnessing a slowdown, as consumers started going out for shopping and other related activities. 

Now, with the holiday season in focus, investors might keep a close watch on the sector, for cues on the consumers' behavior amid a slowdown in the global economy. 

The central bank keeps raising the interest rates to slow down demands while on the other hand, the stubbornly high inflation has hurt traders' sentiment in recent months. 

Let's look at some of the e-commerce stocks and their recent performance highlights ahead of the holiday season:

Amazon.com, Inc. (NASDAQ: AMZN)

Amazon is one of the major technology firms by market cap that specializes in e-commerce business. The company, with a P/E ratio of 102.7, also engages in other businesses like cloud computing, digital streaming, and other related services. 

Talking about its stock performance, AMZN stock plummeted 32 per cent YTD and around 30 per cent YoY. However, in the last three months, it showed gains of about one per cent.

The company said that it is hiring around 150,000 employees throughout the US full-time, part-time, etc., to enhance its services during the holiday. 

Amazon.com, Inc.'s net sales rose seven per cent YoY to US$ 121.2 billion in the second quarter of fiscal 2022 while experiencing a net loss of US$ 2 billion. In the year-ago quarter, the US$ 1.14 trillion market cap company's net income was US$ 7.8 billion.

Etsy, Inc. (NASDAQ: ETSY)

Etsy is an e-commerce firm that specializes in vintage items and other related products like jewelry, home decor, etc. The company also sells a range of handmade items for consumers. 

The US$ 13.41 billion market cap company's stock shrank around 51 per cent YTD and 50 per cent YoY. In the last three months, the ETSY stock added nearly 27 per cent through October 12.

Etsy's Q2 FY22 revenue was US$ 585.1 million, up 10.6 per cent YoY, while its net income fell 25.6 per cent YoY to US$ 73.1 million.

eBay Inc. (NASDAQ: EBAY)

eBay is another leading US-based e-commerce firm with a dividend yield of 2.34 per cent.

The price of eBay stock lost around 44 per cent YTD and 50 per cent YoY. In the last three months through October 12, its price lost around 13 per cent. eBay stock touched its 52-week low of US$ 36.18 on October 3, 2022. 

The e-commerce firm's revenue dropped by nine per cent YoY to US$ 2.4 billion in Q2 FY22, while its net income fell 18 per cent YoY to US$ 554 million.

Source: ©Kalkine Media®; © Canva via Canva.com

Chewy, Inc. (NYSE: CHWY)

Chewy is an e-commerce firm that primarily sells pet food and other related products. The e-commerce company holds a market cap of US$ 14.22 billion. 

The stock price of the e-commerce company decreased by over 42 per cent YTD and 45 per cent in the last 12 months. In the last three months through October 12, the CHWY stock's price declined about 20 per cent. 

Chewy Inc.'s total sales jumped 12.8 per cent YoY to US$ 2.43 billion in Q2 FY22, while its net income was US$ 22.34 million. In the preceding year's same quarter, the e-commerce company incurred a net loss of US$ 16.68 million.

Shopify Inc. (NYSE: SHOP)

Shopify is a leading Canada-based e-commerce company that had a market cap of US$ 32.76 billion. The company, through its platform, provides online stores and retail point-of-sale solutions.

The price of the SHOP stock was down over 81 per cent YTD while falling around the same per cent in one year. In the last three months through October 12, its price declined around 20 per cent. The e-commerce company's stock touched its 52-week low of US$ 24.95 on Tuesday, October 11, 2022. 

The Ottawa, Canada-based company said on October 6, that it would report its third-quarter earnings results on Thursday, October 27, at 8:30 am ET. 

Meanwhile, in Q2 FY22, Shopify Inc's revenue rose 16 per cent YoY to US$ 1.3 billion, representing a three-year CAGR of 53 per cent. However, the US$ 32.76 billion market cap e-commerce company's net loss was US$ 1.2 billion in Q2 FY22, against an income of US$ 0.9 billion in Q2 FY21.

Bottom line:

The third quarter earnings season would gather momentum this week. A host of several key economic data, including CPI or inflation data are also due this week. The week is going to be very crucial for the investors, as it might set the stage for the future course of action of the Fed officials. 

In addition, the indices are witnessing sharp decline amid economic challenges in recent days. Most recently, the Nasdaq Composite Index marked its place into the bear market for the second time this year on Tuesday, October 11. 

Several retailers have cited that the strong dollar, supply-chain woes, and inflation are still weighing on their businesses. As investors might be doubtful about the performance of the e-commerce sector during the holiday season, they would be closely watching the corporate earnings for further insights. 

Several companies have already started their holiday campaigns to attract consumers, but it cannot be predicted how the companies would perform amid the turbulence in the broader market.