E-commerce stocks have skyrocketed in recent months as the coronavirus pandemic prompted consumers to switch to online shopping more quickly.
Not surprisingly, three of the industry's top publicly traded funds – the Amplify Online Retail ETF (NASDAQ :), the Global X E-commerce ETF (NASDAQ 🙂 and the ProShares Online Retail Fund (NYSE 🙂 – all trade close to their respective highest point ever.
While most of the focus was on the mega-cap players like Amazon (NASDAQ :), Alibaba (NYSE :), Shopify (NYSE 🙂 and PayPal (NASDAQ :), three small-cap stocks could have the best growth potential in the coming months offer and are worth considering given their emerging dominance in their respective e-commerce markets.
1. Pinduoduo: Chinese e-commerce platform
Shanghai-based Pinduoduo (NASDAQ 🙂 operates a fast-growing e-commerce platform offering a wide variety of low-cost products, from clothing and electronics to furniture and household items, and even groceries.
It is currently the third largest e-commerce platform in China in terms of gross trading volume, after Alibaba and JD (NASDAQ :).
PDD launched its IPO in July 2018. In the past 12 months, stocks have risen nearly 450% as Chinese consumers shift their purchases online due to the coronavirus pandemic.
Shares rose to a new high of $ 212.31 on Tuesday before closing at $ 202.81. the Chinese e-commerce technology company has a market capitalization of approximately $ 245 billion.
PDD trades at a price-to-sell ratio of about 36, but despite concerns about high valuations, it appears to be continuing its march given its emerging status as one of the leading e-commerce operators in China.
Pinduoduo – which exceeded expectations for its early November – is expected to report the following financial results before the US market opens on Wednesday, March 10. Consensus estimates are for earnings of $ 0.02 a share, significantly better than a loss of $ 0.24 a share a year earlier.
Revenue is expected to grow nearly 77% year-on-year to a record high of $ 2.97 billion, driven by strong growth in monthly active users (MAUs) and active buyers.
Investors will be happy to receive updates on the number of users of Pinduoduo to see if it can maintain its scorching growth rate. The ecommerce platform said it had 643.4 million MAUs and 731 million active buyers at the end of the third quarter, up 50% and 36%, respectively, from the same period a year ago.
Gross Trading Volume (GMV) on the platform, which grew 73% year-over-year to $ 214.7 million in the third quarter, will also be mapped.
2. Jumia: Africa & # 39; s Leading Online Marketplace
Lagos, Nigeria-based Jumia Technologies (NYSE 🙂 is Africa's leading e-commerce platform , which helps millions of consumers and merchants in different countries to connect and transact a wide variety of goods, including fashion clothing, smartphones and groceries.
Jumia, by some the & # 39; Amazon or Alibaba of Africa & # 39; also offers a logistics service that enables the shipping and delivery of packages from sellers to consumers, and a payment service, which facilitates the payments of online transactions for the Jumia ecosystem.
The JMIA stock made its debut on the New York Stock Exchange in April 2019 and has been one of the best performing companies in the industry for the past year. Shares have skyrocketed 950%, thanks to strong growth in e-commerce spending in Africa.
Shares ended at $ 61.88 yesterday, ahead of their all-time high of $ 69.89 reached on February 10, giving the e-tailer a market cap of about $ 5.6 billion.
The Africa-focused e-commerce company is scheduled to report its fourth quarter results before the opening bell on Wednesday, February 24. The consensus calls for a loss per share of $ 0.36, less than a loss of $ 0.79 a share a year earlier.
Revenues are expected to be $ 41.9 million, down from $ 49.2 million in the past year, as a result of the ongoing transition from a first-party retail company to more of a marketplace platform. third parties.
In the long run, the new strategy will cause the company to generate higher sales commissions and execution fees and is expected to lead to significant bottom line improvements and higher levels of user engagement.
Beyond the top and bottom numbers, annual active customers, which increased 23% to 6.7 million at the end of the third quarter, will be closely monitored.
Jumia is the leading online marketplace in Africa and despite the run-up in its stocks, it remains a great way to bet on the growing e-commerce boom in the African market.
3. Ozone: Main Beneficiary of Russia's E-Commerce Growth
Moscow-based Ozone (NASDAQ :), founded in 1998 as an online bookstore , was one of Russia's first e-commerce operators. It is the country's third largest online shopping platform and one of the six most valuable Russian technology companies.
The company's online marketplace platform offers more than 5 million products in more than 20 product categories, including apparel and groceries. , household items, toys and electronics.
Ozone was also the first Russian online retailer to launch consumer loans for various online purchases, as well as its own branded debit card, the issuance of which almost fivefold from 10,000 in 2019 to 260,000 in 2020.
The e-commerce giant went to NASDAQ at the end of November for $ 30 a share, giving it a valuation of $ 6.2 billion. It has also benefited from record sales growth during the COVID-19 pandemic.
OZON shares, which are up 116% since their trading debut, reached $ 65.09 last night, not far from the record high of $ 68.60 on Feb. 9. At its current level, it has a market capitalization of approximately $ 13.3 billion.
With a reasonable price-to-sell ratio of 11, Ozon offers investors a great opportunity to take advantage of the submerged and fragmented Russian e-commerce market.
Yearly was 93% in 2019 and during the first nine months of 2020 it increased 70% to $ 876.5 million.
Even more impressive, Gross Merchandise Value (GMV) more than doubled, at 142% year-over-year, as Russian consumers flocked to their online marketplace.
From the end of last quarter, active buyers jumped 138% from the same period last year to 11.4 million. Meanwhile, more than 51 million people downloaded the company's shopping app, which had 41 million monthly active users in the third quarter.
