3 Best Ecommerce Stocks To Buy Now

Three actions that I really like for 2021 are Farfetch (NYSE: FTCH), Stamps.com (NASDAQ: STMP), and eXp World Holdings (NASDAQ: EXPI). These three stocks dominate their respective sectors. Farfetch is a rapidly growing $ 22 billion company with high fashion sales shifting to internet shoppers around the world. Meanwhile, Stamps.com is the primary shipping destination for small retailers moving online. And eXp World is using the internet to transform the way we buy and sell real estate.

The shareholders of all these names have been amply recognized over the past year. The value of Stamps.com nearly tripled, with shares rising 195%. And Farfetch stock has had an incredible year, jumping 459%. Both of these actions were overshadowed by eXp World. Over the past year, eXp shares have risen 981%.

Is it too late to buy? Not at all. Read on to see why this outperformance of these three names is just the start.

Image source: Getty Images.

1. Farfetch’s market opportunity is incredible

The fashion market is incredibly large: people spend $ 1.9 trillion annually on clothes and shoes. Over the next decade, more and more of this business will move online. We have seen this happen time and time again, from books and electronic games to automobiles and real estate.

In haute couture, the dominant internet name in this category is not Amazon, the king of e-commerce, but rather Farfetch, the behemoth of the United Kingdom. This is because high end brands are so important in selling high priced clothing. Although Farfetch has an internet portal, most of its money is made in the background, helping other fashion retailers switch to online sales. In this sense, Farfetch is probably much closer to the Shopify business model that from amazon.

For the third quarter of 2020, Farfetch reported nearly $ 800 million in haute couture has been sold on its network. Farfetch also reported that Ali Baba and Richemont had almost invested $ 1.2 billion to Farfetch as the company expands its reach of high fashion in China, the world’s largest market. The company estimates that China represents an annual opportunity of $ 175 billion for its more than 3,500 high fashion brands by 2025.

2. Stamps.com has arrived

Stamps.com has been around for a few decades. The online cheap postage seller first went public in 1999. Like many Internet companies, the stock initially skyrocketed and then collapsed in 2000. For the next 15 years , the stock was disappointing. And then in 2015, the stock started to climb. Over the next four years, it went from $ 46 per share to $ 281. What caused this increase in the stock?

I think revenue started to increase with the rise of Shopify. This is because Shopify allows small retailers to compete with Amazon. As more small businesses have started to participate in the online marketplace, these retailers are turning to Stamps.com to help cover shipping costs.

Stamps.com stock crushed in 2019, lest the cancellation of its exclusivity contract with the US Postal Service doom the company. It turned out to be a huge buying opportunity. Now Stamps.com has a major shipping agreement with UPS, and he still contracts with the post office. Service subscribers can save up to 62% on the UPS rate.

As a result of COVID-19, internet sales are skyrocketing and the business of the company is booming. Stamps.com enjoys 21% profit margins. Quarterly revenues are up 42% from a year ago, and profits are up 600%. And the stock is very cheap, trading at six times sales. Value investors who are afraid of owning Shopify (at 63x sales) might want to buy Stamps.com. This shipping company is taking advantage of the Shopify revolution, and the stock is much cheaper.

3.eXp World still has room to develop

Real estate sales represent an incredibly large market opportunity, potentially reaching $ 10,000 billion worldwide. It took a long time for people to figure out how to move this business online, but now it’s starting to happen. eXp World is a virtual real estate agency without physical operations. The company has 41,000 real estate agents around the world, working remotely via the Internet.

While several companies are trying to move real estate sales online, at present, only we succeded. Compare eXp World’s revenue growth with internet competitors Zillow and Red tuna.

Society Q3 revenue (2019) Third quarter revenue (2020) Income growth rate
Zillow $ 745 million $ 657 million (11%)
Red tuna $ 239 million $ 237 million (0.7%)
World Exp $ 282 million $ 564 million 99.9%

Data source: Company quarterly reports and Yahoo! finance.

I can’t remember the last time I saw such marked differences between the competitors. It’s amazing to me. While all three companies are using the internet to transform real estate sales, one is performing remarkably well while the others are showing signs of failure. The main difference seems to be eXp World’s emphasis on real estate agent remuneration, and attract (and keep) the best agents under its roof.

What’s exciting about eXp World is that the stock had 10 bagging last year, yet the company’s market cap is only $ 9 billion. This is just the start for a company bringing the massive $ 10,000 billion real estate market to the Internet.

In 2018, eXp World acquired Virbela, a cloud-based platform that allows people to have virtual meetings online. The company sees its subsidiary Virbela compete Zoom in Internet meetings. Using Virbela, eXp World organized a virtual exhibition with 10,000 people in attendance. Try to do this during a Zoom call!

Three major stocks for 2021

I’m bullish on these names for 2021 due to the exceptional growth rates, huge market opportunities, and (relatively) cheap prices. Farfetch has a price / sales ratio of 13, while Stamps.com has a P / S of 6 and eXp World sells 6 times its revenue. These three actions currently look like big buys.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

About Daisy Rawson

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