3 Upgrades In e-Commerce Moving The Market Today
Digitization, the Internet, and e-commerce are among the biggest winners of the pandemic. Secular trends that had been growing by double-digits were accelerated to high double-digit and even triple-digit paces. As explosive as the growth was over the past year, there is still plenty of room for growth within the space. Today's lineup features three companies that are paving a path to profitability for their shareholders and their clients.
Similarweb Data Analytics 7 Times A Buy
If you've ever done any work on the internet related to SEO, traffic analysis, or e-commerce you are likely familiar with the name Similarweb (NYSE: SMWB). If not, Similarweb is a data analytics firm servicing business and industry across all verticals. The company IPO'd less than a month ago and is already attracting the attention of the analyst community. With the lock-up period expiring, no less than seven analysts have come out with positive commentary. All of them rate the stock a buy or better With a consensus price Target that assumes at least 25% upside. The high price target of $32 is held by Citigroup and assumes nearly 50% upside.
In its note to shareholders, Citigroup cited tailwinds from increasing enterprise digitization and the use of e-commerce. The firm likes Similarweb’s differentiated suite of alternative data assets specifically designed for non-technical users. Citigroup is expecting near-term growth reacceleration due to economic reopening and long-term growth to fuel lucrative margin expansion. Other names with buy ratings include JMP securities, Barclays, and Jefferies. Shares of the stock have been trending sideways since the IPO but appear to have a firm base of support in the $20 to $21.50 region.
Global-e Online Is A Platform For Cross-Border e-Commerce
Online e-commerce platforms are nothing new. What is new, or we should say newer, are platforms that provide both buyers and sellers the opportunity for cross-border transactions. Transactions that have been, in the past, very messy. Global-e Online (NASDAQ: GLBE) is one such platform that provides a durable solution to complex e-commerce problems.
This company also IPO'd recently and has just released its first Q1 financial results as a publicly-traded company. Some key highlights include gross merchandise volume up 133%, revenue up 134%, and fulfillment services revenue up 128%. Also of note are gross margins which increased 390 basis points from the previous year to come in at 33.3%.
As with Similarweb, this company is emerging from a lock-up period and the analysts are abuzz. There have been no fewer than six major sell-side reports initiating the stock at a buy since the lock-up expired. JMP Securities calls the firm an excellent opportunity for investors to catch long-term durable growth and capital appreciation. Looking forward, this long-term durable growth will be facilitated by deals with companies like Shopify that will provide access to Global-e-services to all Shopify users. Unlike similarweb, shares of this stock have only moved higher since the IPO and appear to be gaining momentum.
Etsy, e-Commerce For Artists And Craftspeople
Etsy (NASDAQ: ETSY) is not new to the e-commerce business. The company has been around for quite a few years but has been gaining momentum and relevancy over the past year or two. The pandemic accelerated solid double-digit growth to solid triple-digit growth and, even with some very tough comps on the horizon, double-digit to triple-digit growth is expected to continue this year.
Atlantic Securities just initiated coverage of Etsy at Overweight with a $200 price target. This target is below the $218 consensus target but we think both are too low. We view the high price target of $265 as more in line with the company’s value. Price action in shares of Etsy has been moving lower over the past month but may have found a bottom. The caveat for investors is that price action remains below the 30-day EMA where it may languish until the next catalyst emerges and that may not be until the next earning cycle. If, however, price action moves above the EMA we would consider that a signal to buy.
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