E-commerce Stocks P/FCF Multiples, Which One is the Best?

[Miser]Q32023 Industrial Special

According to @PoundingDaTable, Global e-commerce sales are expected to surpass $8T by 2027, accounting for almost 25% of total retail sales.

In this post, let's delve into what sets each top player apart & their competitive moats.

What is P/FCF Multiple?

The P/FCF ratio takes a company's market capitalization and divides it by its free-cash-flow.

What is a good price to cash flow ratio?

A good price to cash flow ratio is anything below 10. The lower the number, the better the value of the stock. This is because a lower ratio indicates that the company is undervalued with respect to its cash flows.

Which E-commerce stock is on your watchlist？

If not, hope the below info helps you to understand more on the company that interests you. (Data as of 6 December 2023)

Disclaimer: The data and analysis presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.

1. $Shopify(SHOP)$ is trading at $71.41 with a market capitalization of $91.362B & a YTD2023 of 104.9%

• Business Description: A leading e-commerce platform that enables businesses of all sizes to set up online stores and sell products.

• Competitive Advantage: They're a leading e-commerce platform empowering businesses of various sizes to create and manage online stores. It offers customizable storefronts, inventory management, payment processing, and sales tracking. Integrating with numerous third-party apps, Shopify facilitates marketing, analytics, and customer engagement. Key features include Shopify Payments for streamlined transactions and Shopify POS for integrating online and offline sales.

• Target Price from Tipranks:

2. $MercadoLibre(MELI)$ is trading at $1569.25 with a market capitalization of $79.34B& a YTD2023 of 85.44%

• Business Description: LATAM's most popular e-commerce site, offering an online marketplace, payments, and logistics services.

• Competitive Advantage: They operate as a comprehensive e-commerce platform in Latin America, providing a marketplace for a wide range of goods and services. Their ecosystem extends beyond its marketplace to include MercadoPago, which provides a secure payment system for online transactions, and MercadoCredito, offering credit lines. They also run MercadoLibre Classifieds, allowing users to list a wide array of services and items. Their strategic focus on fintech solutions and logistics infrastructure development has solidified their position as a leader in Latin American e-commerce.

• Target Price from Tipranks:

3. $Global-E Online Ltd.(GLBE)$ priced at $35.46 with market capitalization at $5.824B & a YTD2023 of 71.8%

• Business Description: Provides a platform that enables direct-to-consumer cross-border e-commerce.

• Competitive Advantage: They stand out in the cross-border e-commerce sector by not just facilitating international transactions, but also offering end-to-end services that include advanced pricing control, global marketing insights, and localized shopping experiences. They also provide solutions for managing international returns and customer service, making them a comprehensive partner for businesses looking to scale globally.

• Target Price from Tipranks:

4. $Amazon.com(AMZN)$ latest close price at $144.52 with market capitalization at $1.493T & a 72.05% YTD2023

• Business Description: World's largest online retailer, offering a vast array of products and services.

• Competitive Advantage: Amazon is a global e-commerce leader, offering a wide range of products and services. Known for innovations like Amazon Marketplace and Amazon Fresh, it leverages AI and machine learning for efficient operations. Amazon Prime enhances customer loyalty, while their logistical prowess and initiatives like Amazon Go and drone delivery showcase their innovative edge.

• Target Price from Tipranks:

5. $Sea Ltd(SE)$ latest close price at $38.58 with market capitalization at $ 21.943B& YTD2023 of -25.85%

• Business Description: A leading global consumer internet company, operating in digital entertainment, e-commerce, and digital financial services.

• Competitive Advantage: They operate in digital entertainment, e-commerce, and financial services in Southeast Asia and beyond. Their diverse portfolio includes Garena (gaming and e-sports), Shopee (e-commerce), and SeaMoney (digital financial services). Garena's popular game, Free Fire, has a massive following in Southeast Asia. Shopee's mobile-centric approach and integration of entertainment features like live streaming and gamification elements have made it a formidable force in e-commerce. SeaMoney complements these services by offering digital payment and financial services.

• Target Price from Tipranks:

6. $Etsy(ETSY)$ latest close price at $79.54 with market capitalization at $9.525B& YTD2023 of -33.59%

• Business Description: An e-commerce platform focused on handmade or vintage items and craft supplies.

• Competitive Advantage: They provide a marketplace for unique, handmade, and vintage items, supporting independent artists and craftsmen. They have also expanded their services to include tools for sellers, like pattern (for custom websites), Etsy Payments (integrated payment service), and Etsy Shipping Labels. Their focus on sustainability and ethical practices also adds to their appeal among socially conscious consumers and sellers.

• Target Price from Tipranks:

7. $Pinduoduo Inc.(PDD)$ latest close price at $141.99 with market capitalization at $188.646B & YTD2023 of 74.11%

• Business Description: A major Chinese e-commerce platform that offers a wide range of products, focusing on value for money.

• Competitive Advantage: Their innovative approach to e-commerce, integrating social aspects, has led to features like team purchase, where users join forces to buy items at lower prices. They also have a strong focus on agricultural products, connecting farmers directly with consumers, and have invested heavily in developing a logistics network to support this. Pinduoduo's growth is attributed to its ability to tap into lower-tier cities and rural areas in China, a previously under-served.

• Target Price from Tipranks: