Rising internet penetration and changing customer preferences are driving the demand for e-commerce markets across the globe. Rapid technological advancements, rise in online shopping, security advancements, and AI are also driving the market growth.
Therefore, given the industry’s robust outlook, investors may consider placing their bets on blue-chip e-commerce stocks eBay Inc. (EBAY), Liquidity Services, Inc. (LQDT), and Natural Health Trends Corp. (NHTC) for potential gains.
The e-commerce market has changed rapidly due to the increasing accessibility and convenience of the Internet and changing consumer preferences. The number of users in the U.S. e-commerce market is increasing every year and is predicted to continue to grow from 2024 to 2029, reaching a total of 60 million users, representing an increase of 21.9%.
Recently, the Commerce Department’s Census Bureau reported that U.S. retail e-commerce sales in the second quarter of 2024 were $291.6 billion, up 1.3% from the first quarter. The e-commerce estimate for the second quarter of 2024 increased 6.7% from the same period last year. E-commerce sales in the second quarter accounted for 16% of total sales.
More than 33% of the world’s population shops online, and the global e-commerce industry is expected to reach a value of $6.3 trillion in 2024, an 8.8% increase from 2023. The market is further expected to reach the $8 trillion level by 2027, growing at a compound annual growth rate of 7.8%.
Rising demand for voice recognition and artificial reality technologies for improving customer experience, rapid increase in internet users and digital buyers are emerging as major drivers of demand in the e-commerce market.
Given the industry’s robust outlook, investing in fundamentally strong e-commerce stocks EBAY, LQDT, and NHTC could be a smart choice now.
Let’s take a closer look at the fundamentals of these stocks.
eBay, Inc.
EBAY operates a marketplace platform that connects buyers and sellers worldwide. The company’s marketplace platform consists of its online marketplace at ebay.com, its off-platform businesses and the eBay suite of mobile apps.
On July 10, EBAY announced Business Cash Advance, a new eBay Seller Capital revenue-based lending product developed by Liberis. Business Cash Advance is designed to support eBay sellers at every stage of their business by providing eligible U.S. eBay sellers with up to $1 million in working capital within 24 hours.
On April 10th, EBAY and Collectors, the parent company of PSA, entered into a definitive agreement to enter into a series of transactions, including a commercial agreement, the sale of Goldin from Collectors to eBay, and the sale of eBay Vaults from eBay to PSA, that will create a more streamlined buying, selling, grading and storage experience.
During the second quarter ended June 30, 2024, EBAY’s net revenues increased 1.3% year over year to $2.57 billion, and operating income increased 6% year over year to $549 million. The company’s non-GAAP net income from continuing operations was $602 million, or $1.18 per share, up 8.5% and 14.6%, respectively, from the same period last year.
According to the company’s guidance for the third quarter of 2024, EBAY expects revenue to be between $2.5 billion and $2.56 billion. Non-GAAP EPS is expected to be between $1.15 and $1.20.
Analysts expect EBAY’s third-quarter (ending September 2024) revenue to grow 1.7% year-over-year to $2.54 billion, and current-quarter EPS to increase 14.5% year-over-year to $1.18. Additionally, the company has beaten consensus estimates for revenue and EPS for the past four quarters.
EBAY shares have risen 33.3% over the past six months and 36.4% over the past year, closing the last trading session at $59.02.
EBAY’s positive outlook is reflected in its POWR Ratings. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system. POWR Ratings are calculated by considering 118 different factors, each weighted optimally.
EBAY receives an A for Quality and a B for Momentum, ranking it 18th out of 51 stocks in the B-rated Internet industry.
To see more POWR Ratings on EBAY’s Value, Growth, Stability, and Sentiment, click here.
Liquidity Services, Inc. (LQDT)
LQDT is an international provider of e-commerce marketplaces, self-managed auction listing tools and value-added services. The company operates through four segments: GovDeals, Retail Supply Chain Group, Capital Assets Group and Machinio.
On August 5, LQDT partnered with Tiger Group, a leading provider of asset valuation, advisory and disposition services, to sell energy equipment and related assets on behalf of national energy services company El Dorado Gas & Oil, Inc. as part of a court-ordered online auction in connection with the company’s bankruptcy.
On July 30, LQDT relocated and expanded its Indianapolis operations, relocating its reverse logistics warehouse in Plainfield, Indiana, to a larger 203,840 square foot facility in Brownsburg, Indiana. The new facility allows for the storage of more excess inventory from retailers, enhances the customer experience for liquidation resellers and customers, and reaffirms its commitment to sustainability.
During the third quarter ended June 30, 2024, LQDT’s total revenue increased 15.9% year over year to $93.61 million and operating income was $7.89 million. The company’s non-GAAP adjusted net income and non-GAAP adjusted EPS were $9.49 million and $0.30, respectively, representing growth of 7.8% and 7.1% year over year.
Additionally, the company’s non-GAAP adjusted EBITDA increased 10.3% year over year to $14.71 million.
Analysts expect LQDT’s fourth-quarter (ending September 2024) revenue and EPS to increase 16.4% year over year to $93.05 million and 7.7% to $0.28. Additionally, the company has beaten consensus EPS estimates in three of the past four quarters.
The stock has risen 26.1% over the past six months and 18.5% over the past year, closing the last trading session at $21.57.
LQDT’s POWR Ratings reflect the company’s robust outlook: The stock has an overall rating of A, which equates to a “Strong Buy” in our proprietary rating system.
LQDT has a Quality and Sentiment rating of A and a Growth rating of B, ranking it #2 out of 26 stocks in the Internet – Services industry.
To see other evaluations of LQDT’s Value, Stability, and Momentum click here.
Natural Health Trends Corporation (NHTC)
Headquartered in Tsim Sha Tsui, Hong Kong, NHTC is a direct selling and e-commerce company offering personal care, wellness and lifestyle products under the brand name NHT Global. It offers wellness products such as dietary supplements in liquid, capsule, tablet and powder formats, as well as herbal products including vitamins, minerals and herbal supplements.
In terms of trailing 12-month EV/Sales multiple, NHTC is trading at 0.76x, which is 58.8% lower than the industry average of 1.84x. Similarly, trailing 12-month price-to-sales multiple of 1.81 is 32.8% lower than the industry average of 1.36x. Also, trailing 12-month price-to-book multiple of 2.09x is 18.8% lower than the industry average of 2.58x.
For the second quarter ended June 30, 2024, NHTC reported net sales of $10.47 million and gross profit of $7.78 million. The company’s net income was $173,000, or $0.02 per share, compared to a net loss of $219,000, or $0.02 per share, in the same period last year.
Additionally, the company’s cash and cash equivalents and total assets were $15.58 million and $61.49 million, respectively, as of June 30, 2024.
NHTC shares have risen 12.9% over the past six months and 33.7% over the past year, closing the last trading session at $6.89.
NHTC’s sound fundamentals are reflected in its POWR Ratings: The stock has an overall rating of B and is rated a Buy in our proprietary rating system.
NHTC receives B ratings in Growth, Stability and Sentiment, ranking it #3 out of 10 stocks in the A-rated Healthcare – Consumer Goods industry.
To see additional ratings for NHTC’s Momentum, Quality, and Value, click here.
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EBAY shares were trading at $58.69 per share on Friday afternoon, down $0.33 (-0.56%). Year-to-date, EBAY is up 35.97%, while the benchmark S&P 500 index is up 18.67% during the same period.
About the author: Rjkumari Saxena
Rajkumari started her career as a writer but slowly shifted her focus to financial journalism, leveraging her educational background in commerce. Fascinated by the interplay of business and economic changes in stocks, she aims to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to provide investors with insights that lead to profitable decisions. Read more…
