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4 E-commerce Stocks Set to Gain From Rising Coronavirus Cases

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Zacks Equity Research
·4 min read
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Rising coronavirus cases across the United States is leading to the fresh imposition of stay-at-home and social distancing orders. The number of cases has already crossed 15 million, per the latest data from the Johns Hopkins University. Recently, most of the state of California entered into a lockdown again as rising COVID-19 cases overwhelmed hospital beds, as mentioned in a New York Times article.

Such developments largely overshadow positive news on the vaccine front, which will still take time to reach people due to regulatory approvals. Nonetheless, the rising cases and tighter restrictions are positives for e-commerce stocks that have already seen an unprecedented rise in online sales owing to the pandemic.

With the economy on lockdown for the better part of the year, online retail sales skyrocketed. People were confined within their homes and avoided going to brick-and-mortar stores. Consequently, they resorted to online shopping.

Notably, online retail sales for the third quarter moderated but stayed on the growth trajectory following the record highs set in the second quarter. The Commerce Department reported that on a not adjusted basis, online retail sales in the third quarter grew 37.1% year over year, to $199.44 billion from $145.47 billion, as quoted in a Digital Commerce 360 article. The article said that although growth moderated from 44.4% year-over-year improvement witnessed in the second quarter, it was the second-highest year-over-year growth for a third quarter going all the way back to 2000.

Moreover, online retail sales during the beginning of the holiday season were good as well. The trend of online shopping looks set to continue in the near future as well. The convenience of being able to go through full catalogues of items from a mobile phone, tablet or computer and having them delivered at doorsteps is sure to remain attractive to consumers. In fact, data from Statista suggests that e-commerce sales as a percentage of total retail sales in the United States is expected to reach 12.4% in 2020 and 13.7% in 2021 from 11.1% in 2019.

4 Stocks to Watch Out For

Rising coronavirus cases across the United States is sure to help e-commerce stocks as consumers look to shop online while being confined within their homes. Moreover, the trend of online shopping is expected to remain on an upward trajectory. Hence, it is a judicious time to keep an eye on e-commerce stocks that can make the most of this development. Here are four stocks that carry a Zacks Rank #2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Wayfair Inc. W engages in the e-commerce business in the United States. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 75.6% over the past 60 days. The company’s expected earnings growth rate for the next quarter is 77%.

Overstock.com, Inc. OSTK operates as an online retailer in the United States. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased more than 100% over the past 60 days. The company’s expected earnings growth rate for the next year is 1.8%.

Amazon.com, Inc. AMZN engages in the retail sale of consumer products and subscriptions in the United States. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 7.7% over the past 60 days. The company’s expected earnings growth rate for the current year is 47.9%.

Revolve Group, Inc. RVLV operates as an online fashion retailer for consumers in the United States. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 25.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 3.2%.

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