Technology

5 E-commerce Stocks Set to Beat Earnings Estimates in Q2

The coronavirus hit-world emerged as a boon for the online retail market during second-quarter 2020.

The market has been gaining from the scenario with seamless and fast delivery of orders becoming an integral part of the new normal as people refrain from stepping outside their homes on fears of contracting the deadly virus.Moreover, door-to-door delivery of items such as groceries, healthcare goods and other essentials during the ongoing pandemic has been driving online orders.

Further, solid momentum across online grocery shopping has been fueling online retail sales across several parts of the world.

This abovementioned scenario is quite evident fromthe stellar performance delivered by the e-commerce giant Amazon AMZN in the quarter under review. Notably, the company has been witnessing a flurry of orders since the onset of the ongoing pandemic. Notably, Amazon’s online grocery sales tripled year over year in the second quarter. Further, the company’s strong overall online store sales are testament to the fact that it capitalized well on surging online shopping demand worldwide.

Moreover, the company’s strong sales outlook for third-quarter 2020 indicates that the e-commerce space is likely to sustain momentum courtesy of coronavirus-induced restrictions.

eBay EBAY, another major e-commerce player, also delivered robust second-quarter performance on the back of its solid Marketplace growth and accelerating gross merchandise volume. Notably, the company’s positive outlook for the current quarter reflects the fact that it anticipates to continue benefiting from solid growth in e-commerce space owing to shelter-in-place protocol. Notably, eBay has raised full-year guidance, which remains encouraging.

Hence, we believe growing proliferation of ultrafast delivery services and rapid adoption of online payment applications in this conductive scenario are likely to have benefited the e-commerce stocks during the second quarter.

Moreover, coronavirus induced health risks, which are a major concern globally, are strongly aiding shift in the consumer spending pattern to e-commerce. This is expected to have helpedthe online retail companies in acquiring new customers during the quarter under review.

How to Make the Right Pick?

With the presence of several industry participants, finding the right e-commerce stocks with the potential to beat on earnings can be daunting. Our proprietary methodology, however, makes this task fairly simple.

You could narrow down your choices by looking at the stocks that have the perfect combination of the two key elements: a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP is our proprietary methodology for determining the stocks that have the maximum chances of beating estimates at their next earnings announcement. It is the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.

Our research shows that for stocks with this apt mix of ingredients, the odds of a positive earnings surprise are as high as 70%.

Best Bets

JD.com JD has an Earnings ESP of +13.79% and a Zacks Rank #1 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
 

JD.com, Inc. Price and EPS Surprise

JD.com, Inc. Price and EPS Surprise

JD.com, Inc. price-eps-surprise | JD.com, Inc. Quote

The Zacks Consensus Estimate for second-quarter 2020 earnings has been revised upward by 2.6% to 39 cents per share over the past 30 days.

MercadoLibre MELI is scheduled to report second-quarter 2020 results on Aug 6. The company has an Earnings ESP of +93.88% and a Zacks Rank #2 currently. The Zacks Consensus Estimate for earnings has been revised upward from break-even point to 10 cents per share over the past 30 days.

 

MercadoLibre, Inc. Price and EPS Surprise

MercadoLibre, Inc. Price and EPS Surprise

MercadoLibre, Inc. price-eps-surprise | MercadoLibre, Inc. Quote

 

Alibaba BABA has an Earnings ESP of +5.53% and a Zacks Rank #3 currently. The Zacks Consensus Estimate for first-quarter fiscal 2021 earnings has been revised upward by 6% to $1.95 per share over the past 30 days.

 

Alibaba Group Holding Limited Price and EPS Surprise

Alibaba Group Holding Limited Price and EPS Surprise

Alibaba Group Holding Limited price-eps-surprise | Alibaba Group Holding Limited Quote

 

Wayfair W is slated to report second-quarter 2020 results on Aug 5. The company has an Earnings ESP of +21.40% and a Zacks Rank #3 currently. The Zacks Consensus Estimate for earnings has been revised upward by 2.3% to 89 cents per share over the past 30 days.

 

Wayfair Inc. Price and EPS Surprise

Wayfair Inc. Price and EPS Surprise

Wayfair Inc. price-eps-surprise | Wayfair Inc. Quote

 

Carvana CVNA is scheduled to report second-quarter 2020 results on Aug 5. The company has an Earnings ESP of +12.41% and a Zacks Rank #3 currently. The Zacks Consensus Estimate for loss has narrowed from 83 cents per share to 79 cents per share over the past 30 days.

 

Carvana Co. Price and EPS Surprise

Carvana Co. Price and EPS Surprise

Carvana Co. price-eps-surprise | Carvana Co. Quote

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>


Click to get this free report

Amazon.com, Inc. (AMZN): Free Stock Analysis Report

eBay Inc. (EBAY): Free Stock Analysis Report

JD.com, Inc. (JD): Free Stock Analysis Report

Wayfair Inc. (W): Free Stock Analysis Report

Alibaba Group Holding Limited (BABA): Free Stock Analysis Report

MercadoLibre, Inc. (MELI): Free Stock Analysis Report

Carvana Co. (CVNA): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Technology Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More