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In this article, we will discuss the 15 best e-commerce stocks to buy now. If you want to explore similar stocks, you can also take a look at 5 Best E-Commerce Stocks to Buy Now.
An Analysis of The Global E-Commerce Industry
According to an industry analysis report by The Business Research Company, the global e-commerce market was worth $2.63 trillion in 2021 and is expected to reach a value of $3.04 trillion in 2022, growing at a compound annual growth rate of 15.7%. The market is expected to grow at a CAGR of 12% from 2022 to 2026 and reach a value of $4.79 trillion by the end of the forecasted period. This growth is expected to be driven primarily by the increasing adoption of smartphones and a growing number of internet users. It is estimated that the number of internet users across the globe in 2022 has reached 5 billion, and the number of smartphone owners has climbed to 6.64 billion. Region-wise, North America dominated the market share of the global e-commerce industry in 2022, with the APAC region being the runner-up. The major players operating in the e-commerce market include Walmart Inc. (NYSE:WMT), Alibaba Group Holding Limited (NYSE:BABA), and Amazon.com, Inc. (NASDAQ:AMZN). This article will discuss some of the best e-commerce stocks to buy now for investors that are looking to capitalize on the secular trends that are driving this market's growth.
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Our Methodology
We studied industry analysis reports compiled by leading market research agencies and noted down the companies that are dominating the e-commerce market. We studied these companies' business models and their product pipelines. We then checked for the market sentiment around each stock and only included stocks that had positive market sentiment associated with them. We arranged these stocks according to their popularity among elite hedge funds, from least to most.
Best E-Commerce Stocks to Buy Now
15. Lightspeed Commerce Inc. (NYSE:LSPD)
Number of Hedge Fund Holders: 16
Lightspeed Commerce Inc. (NYSE:LSPD) is a leading provider of cloud-based point-of-sale (POS) software for merchants of all sizes. The company’s software helps merchants manage their businesses by providing tools for customer management, inventory control, employee scheduling, payment processing, analytics, and more. Lightspeed Commerce Inc. (NYSE:LSPD) is one of the best e-commerce stocks to buy now and is worth $2.37 billion on the open market, as of November 30.
On November 3, Lightspeed Commerce Inc. (NYSE:LSPD) posted earnings for the fiscal third quarter of 2022 in which the company outperformed EPS estimates by $0.06. The company generated a revenue of $183.70 million, up 37.89% year over year, and beat estimates by $0.77 million. On November 4, Barclays analyst Raimo Lenschow updated his price target on Lightspeed Commerce Inc. (NYSE:LSPD) to $20 from $27 and reiterated an Overweight rating on the shares.
At the end of Q3 2022, 16 hedge funds were long Lightspeed Commerce Inc. (NYSE:LSPD) and held stakes worth $216 million in the company. This is compared to 15 positions in the preceding quarter with stakes worth $203 million. The hedge fund sentiment for the stock is positive.
Some of the most prominent companies in the e-commerce industry include Walmart Inc. (NYSE:WMT), Alibaba Group Holding Limited (NYSE:BABA), and Amazon.com, Inc. (NASDAQ:AMZN).
14. The RealReal, Inc. (NASDAQ:REAL)
Number of Hedge Fund Holders: 16
The RealReal, Inc. (NASDAQ:REAL) is a leading e-commerce platform for authentic luxury products. The company has been able to establish itself as the go-to destination for luxury consignment. The company has a first-mover advantage in the luxury consignment space and is a clear leader in the area. The RealReal, Inc. (NASDAQ:REAL) is ranked among the best e-commerce stocks to buy now and is currently trading at bargain levels. The stock is trading at a PE ratio of 5x, as of November 30.
On October 18, Piper Sandler analyst Edward Yruma updated his price target on The RealReal, Inc. (NASDAQ:REAL) to $3 from $4 and maintained a Neutral rating on the shares. On November 9, Baird analyst Mark Altschwager revised his price target on The RealReal, Inc. (NASDAQ:REAL) to $3.75 from $6.00 and reiterated an Outperform rating on the shares.
At the close of Q3 2022, 16 hedge funds disclosed stakes in The RealReal, Inc. (NASDAQ:REAL). The total value of these stakes amounted to $20.99 million. As of September 30, Marshall Wace LLP is the top investor in the company and has stakes worth $5.06 million.
13. Chewy, Inc. (NYSE:CHWY)
Number of Hedge Fund Holders: 25
Chewy, Inc. (NYSE:CHWY) is a leading online pet retailer in the United States and has a rapidly expanding customer base, revenue growth, and an expanding product offering. The company deals in pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its website.
Wall Street is bullish on Chewy, Inc. (NYSE:CHWY) and the stock is placed on our list of the best e-commerce stocks to buy now. On November 15, MoffettNathanson analyst Michael Morton started coverage of Chewy, Inc. (NYSE:CHWY) with a Market Perform rating and a $33 price target. On November 21, Deutsche Bank analyst Lee Horowitz raised his price target on Chewy, Inc. (NYSE:CHWY) to $50 from $40 and maintained a Buy rating on the shares.
At the close of the third quarter of 2022, 25 hedge funds held stakes in Chewy, Inc. (NYSE:CHWY) worth $303.6 million. This is compared to 25 positions in the previous quarter with stakes worth $288.5 million. As of September 30, Marshall Wace LLP is the dominant shareholder in the company and has a position worth $58.2 million.
Here is what ClearBridge Investments had to say about Chewy, Inc. (NYSE:CHWY) in its second-quarter 2022 investor letter:
“We exited our position in Chewy, Inc. (NYSE:CHWY), in the consumer discretionary sector. While we continue to have a favorable opinion of the online pet products retailer, we decided to consolidate our exposure to the pet industry.”
12. Wayfair Inc. (NYSE:W)
Number of Hedge Fund Holders: 31
Wayfair Inc. (NYSE:W) is an American e-commerce company that specializes in selling home goods and furniture. Founded in 2002, Wayfair Inc. (NYSE:W) has quickly become one of the leading online home goods retailers in the United States. The company's website offers customers an extensive selection of home items, including furniture, décor, rugs, lighting, kitchenware, and more. The company is well-positioned to capitalize on the long-term growth of the e-commerce industry and is ranked among the best e-commerce stocks to buy now. As of November 30, Wayfair Inc. (NYSE:W) is worth $3.79 billion on the open market.
This November, Truist analyst Naved Khan updated his price target on Wayfair Inc. (NYSE:W) to $50 from $60 and maintained a Buy rating on the shares. On November 30, Stephens analyst Nicholas Zangler reiterated his $45 price target and an Equal Weight rating on Wayfair Inc. (NYSE:W).
At the end of Q3 2022, 31 hedge funds were eager on Wayfair Inc. (NYSE:W) and disclosed positions worth $467.4 million in the company. Of those, Spruce House Investment Management was the top investor in the company and held stakes worth $113.9 million.
Here is what Vulcan Value Partners had to say about Wayfair Inc. (NYSE:W) in its second-quarter 2022 investor letter:
“We sold Wayfair Inc. (NYSE:W) during the quarter. It was a mistake. Wayfair Inc. is a leading e-commerce retailer for home goods and furnishings. Prior to our initial investment, we watched Wayfair build its business. As customers increased, revenue per customer expanded, and the company grew year over year. Wayfair invested heavily in its logistics network to handle big and bulky furniture from freight forwarding all the way to last mile delivery. We believed this created a positive flywheel.
Wayfair became a more cost-effective distribution channel for suppliers, reduced delivery times to customers, and improved its customer shopping experience. Nonetheless, at the time, Wayfair did not produce free cash flow, and therefore it did not qualify for investment. During the pandemic, consumer behavior changed, and as a result, the company’s margins and free cash flow reached levels previously not expected for many years to come. We believed the competitive dynamics had changed for the long term in favor of Wayfair and the company qualified for investment.
We initially purchased Wayfair in the fourth quarter of 2020. Although we knew Wayfair would face difficult comparisons post-COVID, we believed the company would continue to generate free cash flow and its value would continue to be stable. The recent combination of persistently high levels of inflation, a possible recession, and the company’s commitment to continue investing heavily for future growth has resulted in negative free cash flow. We believe sustainable free cash flow is the key ingredient to long-term value stability and the company’s future free cash flow is in question. Therefore, we followed our discipline and sold Wayfair.”
11. Coupang, Inc. (NYSE:CPNG)
Number of Hedge Fund Holders: 36
Coupang, Inc. (NYSE:CPNG) is a leading South Korean e-commerce company that is revolutionizing the shopping experience of consumers in South Korea and beyond. The company has seen strong growth in recent years which has been driven by a combination of factors, including the company’s strong digital platform, its heavy investments in logistics and technology, and its well-executed customer-centric strategy. Coupang, Inc. (NYSE:CPNG) has been dubbed the 'Korean Amazon' and is one of the best e-commerce stocks to buy now.
On November 9, Coupang, Inc. (NYSE:CPNG) released earnings for the third quarter of fiscal 2022. The company generated a revenue of $5.10 billion and reported earnings per share of $0.05, outperforming consensus by $0.08. This October, HSBC analyst Junhyun Kim took coverage of Coupang, Inc. (NYSE:CPNG) with a Buy rating and a $27.80 price target.
At the close of the third quarter of 2022, 36 hedge funds were long Coupang, Inc. (NYSE:CPNG) and disclosed stakes worth $3.85 billion. This is compared to 37 hedge funds in the previous quarter with stakes worth $2.93 billion. As of September 30, Maverick Capital is the top investor in Coupang, Inc. (NYSE:CPNG) and has a position worth $1.35 billion.
Here is what Baron Funds had to say about Coupang, Inc. (NYSE:CPNG) in its third-quarter 2022 investor letter:
“Coupang, Inc. (NYSE:CPNG), the largest e-commerce platform in South Korea, contributed after reporting a sizable beat on second quarter earnings and raising annual EBITDA guidance. Upside was concentrated in e-commerce, where Coupang is now driving sequential margin expansion while maintaining a growth rate that is triple that of the industry average, lending credence to the investment case that Coupang will consolidate the fragmented e-commerce industry in Korea across both general merchandise and grocery, with healthy long-term margins to follow.”
10. eBay Inc. (NASDAQ:EBAY)
Number of Hedge Fund Holders: 42
eBay Inc. (NASDAQ:EBAY) has a large and established user base that provides a solid foundation for future growth. The company has over 138 million active buyers and roughly 18 million sellers, representing one of the largest online commerce ecosystems in the world. Moreover, eBay Inc. (NASDAQ:EBAY) has invested heavily in its mobile platform, making it easier for consumers to shop and transact on the go. The company also has a robust presence in the global market. The company's presence in over 190 countries provides significant potential for growth, especially in emerging markets, and places it among the 15 best e-commerce stocks to buy now.
On November 3, Benchmark analyst Daniel Kurnos revised his price target on eBay Inc. (NASDAQ:EBAY) to $62 from $66 and reiterated a Buy rating on the shares. This November, Baird analyst Colin Sebastian updated his price target on eBay Inc. (NASDAQ:EBAY) to $55 from $60 and maintained an Outperform rating on the shares.
At the end of Q3 2022, 42 hedge funds were bullish on eBay Inc. (NASDAQ:EBAY) and disclosed positions worth $1.07 billion. Of those, D E Shaw was the largest shareholder in the company and held stakes worth $218 million.
Here is what Smead Capital Management had to say about eBay Inc. (NASDAQ:EBAY) in its third-quarter 2022 investor letter:
“Two things are very noticeable right off the top. First, sometimes you have to be happy losing less in a bear market environment so that you have more of your capital to grow in the next bull market. We are never really happy losing money. Second, 2022 is likely to be our third year of existence as a fund to lose money for the year. This year would join 2008 and 2018 in this undistinguished category. Our biggest detractors was dominated by eBay (NASDAQ:EBAY). Consumer/investor fears about media and e-commerce hit WBD and EBAY and profit taking in Amgen came from early 2022 strength.”
9. Carvana Co. (NYSE:CVNA)
Number of Hedge Fund Holders: 43
Carvana Co. (NYSE:CVNA) is an online used car retailer based in Tempe, Arizona. The company sells certified used cars through its website and offers customers a no-haggle car buying experience. Customers can search for a car, get their credit approved, and purchase the vehicle entirely online. Carvana Co. (NYSE:CVNA) is revolutionizing the used car industry and has created an innovative and convenient way for consumers to purchase used cars. The company is well-positioned to become a leader in the used car industry and is one of the best e-commerce stocks to buy now.
On October 19, Wells Fargo analyst Zachary Fadem revised his price target on Carvana Co. (NYSE:CVNA) to $30 from $35 and reiterated an Equal Weight rating on the shares. On November 21, the chief product officer of Carvana Co. (NYSE:CVNA), Daniel Gill, disclosed the purchase of 133,000 class A shares of the company at a price of $7.62 per share. Shortly after this news, the stock rallied 17% on November 23 to $7.94.
At the end of the third quarter of 2022, 43 hedge funds disclosed ownership of stakes in Carvana Co. (NYSE:CVNA) worth $656.4 million. Of those, CAS Investment Partners was the top investor in the company and disclosed a position worth $138.6 million.
Here is what Steel City Capital had to say about Carvana Co. (NYSE:CVNA) in its third-quarter 2022 investor letter:
“As I write, Carvana Co. (NYSE:CVNA), a long-time short, is circling the drain. After reporting earnings, shares have been roughly cut in half while the company’s bonds are now priced anywhere from 35- to 45-cents on the dollar, with yields ranging from 25% to 40%. While the shares already experienced a steep decline during the past year, the postearnings sell-off appears to reflect investors finally acknowledging the company’s near-term liquidity issues. Raising capital – debt or equity – seems unlikely, if not impossible. Bulls had been holding on to the hope CVNA would meet its stated “goal” of generating “significantly positive EBITDA in FY 2023,” but management walked back that aspiration last week. I always thought the word “goal” reflected squishy language that never carried the same weight as “guidance” and drew conclusions accordingly. The difference is much the same as me telling my wife I have a “goal” of having washboard abs vs. “guidance” that I will have them by swimsuit season. The language was deliberate (and probably highly lawyered), and in my estimation, reflected an effort to give bulls something to cling on to without the company exposing itself to a lawsuit when they (inevitably) missed.”
8. Etsy, Inc. (NASDAQ:ETSY)
Number of Hedge Fund Holders: 45
Etsy, Inc. (NASDAQ:ETSY) offers a platform for creative entrepreneurs to showcase and sell their handmade and vintage items. Etsy, Inc. (NASDAQ:ETSY) has been able to capitalize on a growing trend of consumers wanting to buy unique, one-of-a-kind items while allowing sellers to reach a larger audience than they would be able to on their own. The company has also seen strong growth in its user base, with over 88 million active users on the platform as of Q3 2022. This growing user base will help to drive more sales on the platform.
On November 2, Etsy, Inc. (NASDAQ:ETSY) posted earnings for the fiscal third quarter of 2022. The company reported an EPS of $1.07 and beat expectations by $0.30. The company's revenue for the quarter amounted to $594.47 million, up 11.65% year over year and ahead of Wall Street consensus by $30.26 million. On November 3, Deutsche Bank analyst Lee Horowitz raised his price target on Etsy, Inc. (NASDAQ:ETSY) to $95 from $85 and maintained a Hold rating on the shares.
At the close of Q3 2022, 45 hedge funds were bullish on Etsy, Inc. (NASDAQ:ETSY) and disclosed positions worth $1.09 billion. This is compared to 29 positions in the preceding quarter with stakes worth $595.8 million. The hedge fund sentiment for the stock is positive. As of September 30, Harris Associates is the top investor in Etsy, Inc. (NASDAQ:ETSY) and has a position worth $189.5 million.
Here is what ClearBridge Investments had to say about Etsy, Inc. (NASDAQ:ETSY) in its third-quarter 2022 investor letter:
“Stock selection in the consumer discretionary sector proved a tailwind to performance. Etsy (NASDAQ:ETSY), which operates a number of online marketplaces for craft and artisan goods, delivered second quarter results that demonstrated the company’s pricing power, cash flow generation, and margin upside remain intact. While Etsy is experiencing declines in gross merchandise sales, it is seeing better than expected take rates and improved margins. We believe the company is well-positioned to grow advertising spending on its marketplace, bring in new buyers and strengthen its e-commerce advantages.”
7. Sea Limited (NYSE:SE)
Number of Hedge Fund Holders: 55
Sea Limited (NYSE:SE) is a Singapore-based internet company that provides digital entertainment, e-commerce, and digital financial services to consumers and businesses in the Asia Pacific region. The company operates Shopee, one of the largest e-commerce platforms in Southeast Asia. Sea Limited (NYSE:SE) is a leader in the digital entertainment and e-commerce markets in Southeast Asia.
Wall Street analysts are bullish on Sea Limited (NYSE:SE). On November 16, JPMorgan analyst Ranjan Sharma raised his price target on Sea Limited (NYSE:SE) to $75 from $70 and reiterated an Overweight rating on the shares. This November, BofA analyst Sachin Salgaonkar updated his price target on Sea Limited (NYSE:SE) to $74 from $86 and maintained a Buy rating on the shares.
At the close of Q3 2022, 55 hedge funds disclosed ownership of stakes in Sea Limited (NYSE:SE). The total value of these stakes amounted to $2.44 billion. As of September 30, Tiger Global Management LLC is the top investor in the company and has a position worth $535.4 million.
In addition to Sea Limited (NYSE:SE), Walmart Inc. (NYSE:WMT), Alibaba Group Holding Limited (NYSE:BABA), and Amazon.com, Inc. (NASDAQ:AMZN), are also well-positioned to capitalize on the secular growth trends in the global e-commerce industry.
6. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Holders: 62
Shopify Inc. (NYSE:SHOP) has a strong position in the e-commerce sector and offers an increasingly attractive suite of products and services. The company offers a leading cloud-based multi-channel commerce platform that provides tools for merchants to build and manage their online, mobile, and brick-and-mortar stores. Shopify Inc. (NYSE:SHOP) enables merchants to sell their products across multiple channels, including web, mobile, social media, brick-and-mortar, and other marketplaces. The company’s platform makes it easy to customize, manage, and scale an online business. Shopify Inc. (NYSE:SHOP) is one of the best e-commerce stocks to buy now.
On October 27, Shopify Inc. (NYSE:SHOP) posted earnings for the fiscal third quarter of 2022 in which it beat EPS estimates by $0.05. The company generated a revenue of $1.37 billion, up 21.58% year over year and ahead of Wall Street expectations by $30.33 million. On November 30, Jefferies analyst Samad Samana reiterated a Buy rating and his $40 price target on Shopify Inc. (NYSE:SHOP).
At the end of Q3 2022, 62 hedge funds were long Shopify Inc. (NYSE:SHOP) and held collective stakes of $2.43 billion in the company. Of those, ARK Investment Management was the top investor in the company and disclosed a position of $391.5 million.
Here is what Artisan Partners had to say about Shopify Inc. (NYSE:SHOP) in its third-quarter 2022 investor letter:
“Shopify Inc. (NYSE:SHOP) is a leading e-commerce platform supporting over 2 million merchants with software, online storefronts and payments technology. Like Uber, Shopify returned to mid-cap territory during Q2 as the company’s profit cycle and share price have faced significant pressure. Earlier this year, the company began a phase of investments to support a range of future growth drivers, including Shopify Plus for larger brands, logistics services, international expansion, point-of-sale payments and social media-based commerce. With high inflation putting pressure on consumer spending, and with e-commerce activity normalizing after a massive pandemic spike, Shopify’s earnings have fallen sharply. While we have outstanding questions about the likelihood of success for the company’s capital-intensive logistics investments, we decided to take advantage of the stock’s >75% YTD decline and initiate a GardenSM position at a deep discount to our PMV estimate. Our thesis is predicated on our belief there is still a long runway for commerce to move online, and Shopify is well-positioned to win share of this market. The company has created an ecosystem of products (payment processing, financing, shipping, customer engagement tools, etc.), partners (TikTok, Google, Meta), sales channels and over 6,000 apps to help its merchants sell online and establish direct relationships with customers.”
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Disclosure: None. 15 Best E-Commerce Stocks to Buy Now is originally published on Insider Monkey.
