Which ECommerce Giants Are Good Buys Now?
πππIt's 18 days to Black Friday Sales and 49 Days to Christmas! It's The Best and Busiest time of the year for Retailers and ECommerce.
Let's find out which ECommerce Giants Are Great Buys Now?
The Star of the ECommerce last week is $Shopify(SHOP)$
Shopify's share price jumped a massive 30% in just 1 week. This was due to the much better than expected earnings and the positive outcome for the upcoming holiday season. Shopify reported 3rd quarter profit of USD 718 million. This is a big turnaround after a loss of USD 158 million in the previous year quarter.
Shopify is a leading global commerce company that provides essential Internet infrastructure for commerce, offering tools to start, scale, market and run a retail business of any size. Shopify makes commerce better for everyone with a platform and provides services that are engineered for speed, customisation, reliability and security, while delivering a great shopping experience for consumers online and in store.
Shopify is powering millions of businesses in more than 175 countries. Their clients include Mattel, Gymshark, Heinz, Netflix and many more.
Shopify's 3Q 2023 Total revenue increased 25% to USD 1.7 billion compared to previous year. Gross Merchandise volume increased 22% to USD 56.2 billion, an increase of USD 10 billion over the previous quarter in 2022.
Shopify's Gross Profit grew 36% to USD 901 million, compared to previous year quarter. Gross Margin for the quarter was 52.6% compared to 48.5% in 3Q 2022.
Operating income was USD 122 million or 7% of revenue compared to an operating loss of USD 346 million or 25% of revenue. This is due to higher gross profit and lower operating expenses for the quarter.
Free cash flow was USD 276 million compared to negative free cash flow of USD 148 million a year ago.
Wall Street Analysts are bullish on Shopify with a Buy rating, Target price of USD 67.00, an upside potential of 10%.
Share price is up 6% last Friday after it released its 3Q 2023 earnings that beat analysts'estimates and showed that its cost cutting efforts are working. Amazon's revenue rose 13% to USD 143.1 billion in the 3rd quarter.
Amazon reported an operating margin of 7.8%, the highest since it reached a record of 8.2% in the 1st quarter of 2021.
Amazon's net income rose more than 3 times to USD 9.9 billion compared to USD 2.9 billion in the previous year quarter. Amazon's earnings of 94 cents per share far exceeded the 58 cents expected by Wall Street.
CEO Andy Jassy has been in cost cutting mode, cutting 27,000 jobs since last year and trimmed expenses in units across the company.
Amazon's share price is up 61.5% year todate.
Wall Street Analysts are bullish on Amazon with a Buy rating, Target price of USD 176.08, an upside potential of 27%.
share price rose 5% on Friday. It is up 25% year todate and 75% in just 1 year. PDD is the 3rd largest ECommerce company in China and the fastest growing. PDD owns Temu which operates in many countries globally and Duo Duo Grocery. PDD is synonymous with Value for Money. PDD is scheduled to announce its latest earnings report on November 23, 2023.
Wall Street Analysts are bullish on PDD, with a Buy rating, Target price of USD 119.85, an upside potential of 12%.
Share price rose 2% last week but is down 7% year todate. Alibaba however is up 22% in the past year. In March 2023, Alibaba outlined plans to split itself into 6 different business units. Each unit has its own Independent management and will consider pursuing their own IPO and raising cash for development.
I believe that it is a great move and will make Alibaba more efficient and effective. Alibaba will report its 3Q 2023 earnings on November 16 2023.
Wall Street Analysts are bullish on Alibaba with a Buy rating, Target price of USD 140.42, an upside potential of 64%.
Share price jumped 4% last Friday but is down 53% year todate. JD had a tough time this year as some Wall Street Analysts cut price targets and revenue growth forecasts for JD. This is due to a weaker than expected recovery in consumer spending.
JD is expected to report its Q3 2023 earnings on November 15 2023.
Wall Street Analysts are nonetheless still Bullish on JD with a Buy rating, Target price of USD 46.26, an upside potential of 70%.
The Global ECommerce market size is projected to hit USD 57.22 Trillion by 2032 from USD 14. 14 Trillion in 2022, expanding at a CAGR of 15% during this period. Asia Pacific contributed more than 57% of revenue share in 2022.
That's why it is good to invest in these ECommerce Giants to watch them grow exponentially in the future. My Top Pick would be Amazon as it is much more than just an ECommerce Company. While Amazon is ranked as the Number 1 as the most popular shopping website in the world, it has the largest market share in Cloud Computing with 32%. Amazon is also into AI with a USD 4 billion investment in Anthropic to develop foundation models which underpin Generative AI systems.
ECommerce powered by AI is a potent combination that will catapult Amazon into the next phase of exponential growth ahead.
I am super excited at the huge possibilities ahead not only for Amazon but for the other ECommerce Giants as well.
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JD needs to break into the US market like PDD. But notheless good price action from both. I see JD has more room to grow just need those institutional investors back.
Hope BABA can go back to $100 up soon!!!
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