The advent of the internet and digital technologies has revolutionized how business is conducted, giving rise to the booming phenomenon known as e-commerce. Thus, investors could consider watching fundamentally sound e-commerce stocks, Coupang, Inc. (CPNG), Etsy, Inc. (ETSY), and Shopify Inc. (SHOP), which are redefining online shopping.
The global e-commerce market is driven by the increasing integration of advanced technologies such as AI, VR, and AR, the growing inclination of consumers towards online shopping, rising investment, growing collaboration, and increasing government initiatives. Looking forward, IMARC Group expects the e-commerce market to grow at a CAGR of 25.8% by 2033.
Moreover, the recent rise in digital literacy has led to an influx of investment in e-commerce firms, leveling the market for new players to set up their base while churning out innovative patterns to disrupt old functioning. Rising investments in the e-commerce sector offer e-commerce platforms a range of opportunities.
Considering these factors, let’s take a look at the fundamentals of the three Internet stock picks.
Stock #3: Coupang, Inc. (CPNG)
CPNG owns and operates retail businesses through its mobile applications and Internet websites, primarily in South Korea. The company operates through Product Commerce and Developing Offerings segments.
CPNG’s 28.97% trailing-12-month ROCE is 166.8% higher than the 10.86% industry average. Furthermore, the stock’s 6.31% trailing-12-month ROTA is 67.6% higher than the 3.76% industry average.
During the fiscal third quarter that ended on September 30, 2024, CPNG’s net revenues increased 27% year-over-year to $7.90 billion. Its net income was reported at $64 million, and EPS came in at $0.04. The company’s adjusted EBITDA increased 44% year-over-year to $343 million.
Analysts expect CPNG’s revenue to increase 24.1% year-over-year to $8.14 billion, with a projected EPS of $0.01 for the fiscal quarter ending December 2024. Moreover, the company has surpassed consensus revenue and EPS estimates in three of the trailing four quarters, which is impressive.
The stock has gained 5.5% over the past three months to close the last trading session at $25.52.
CPNG’s POWR Ratings reflect its positive outlook. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has a B grade for Sentiment and Momentum. CPNG is ranked #43 out of 49 stocks in the Internet industry.
Click here to access the additional CPNG ratings (Value, Stability, Quality, and Growth).
Stock #2: Etsy, Inc. (ETSY)
ETSY operates two-sided online marketplaces that connect buyers and sellers in the United States, the United Kingdom, Germany, Canada, Australia, and France. Its primary marketplace is Etsy.com, which connects artisans and entrepreneurs with various consumers.
ETSY’s trailing-12-month ROTC of 13.50% is 116.7% higher than the industry average of 6.23%. Also, the stock’s trailing-12-month ROTA of 12.54% is 233.2% higher than the industry average of 3.76%.
For the fourth quarter that ended December 31, 2024, ETSY’s revenue increased 1.2% year-over-year to $852.16 million. Its net income came in at $129.91 million, while its net income per share increased by 66.1% year-over-year to $1.17. Its non-GAAP EBITDA went up by 6.4% from the prior year’s quarter to $250.64 million.
Analysts expect ETSY’s revenue for the first quarter ending March 2025 to increase marginally year-over-year to $650.23 million. Street expects its EPS to be $1.05 for the same quarter, up 9.5% year-over-year.
ETSY’s stock has soared 2.2% over the past three months to close the last trading session at $51.53.
ETSY’s robust fundamentals are reflected in its POWR Ratings. ETSY has an A grade for Quality and a B for Momentum. It is ranked #31 out of 49 stocks in the same industry.
Beyond what is stated above, we’ve also rated ETSY for Growth, Value, Stability, and Sentiment. Get all ETSY ratings here.
Stock #1: Shopify Inc. (SHOP)
SHOP is a commerce technology company that provides tools to start, scale, market, and run a business of various sizes in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, and Latin America.
SHOP’s 19.58% trailing-12-month ROCE is 296.3% higher than the 4.94% industry average. Furthermore, the stock’s 6.81% trailing-12-month ROTC is 113.3% higher than the 3.19% industry average.
For the fiscal 2024 fourth quarter that ended on December 31, 2024, SHOP’s revenues increased 31.2% year-over-year to $2.81 billion. Its gross profit grew 27.3% from the prior year’s quarter to $1.35 million. The company’s net income increased 96.8% year-over-year to $1.29 billion.
Shares of SHOP have surged 69.9% over the past six months and 57% over the past year to close the last trading session at $127.66.
SHOP’s POWR Ratings reflect prospects. The stock has a B grade for Growth and Momentum. SHOP is ranked #13 in the same industry.
In addition to the POWR Ratings highlighted above, one can access SHOP’s ratings (Value, Sentiment, Quality, and Stability) here.
What To Do Next?
Get your hands on this special report with 3 low priced companies with tremendous upside potential even in today’s volatile markets:
3 Stocks to DOUBLE This Year >
Want More Great Investing Ideas?
SHOP shares were trading at $123.79 per share on Thursday afternoon, down $3.87 (-3.03%). Year-to-date, SHOP has gained 16.42%, versus a 4.05% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor’s degree in finance and marketing and is pursuing the CFA program.
Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More…