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

Despite e-commerce stocks suffering from the cooling of the pandemic-induced e-commerce boom and unfavorable market dynamics, the signs of easing inflation during the second quarter of 2023 are likely to have benefited them.

According to the data from the Commerce Department, retail sales in the United States rose 0.3% in May, following an increase of 0.4% in April. Online purchases primarily drove the upside. E-commerce sales rose by 0.3%.

Increasing demand for ultra-fast and door-to-door delivery of orders for essentials, medicines, groceries and luxury items is expected to have contributed well.

Moreover, great offers and huge discounts across various product categories available on multiple e-commerce sites might have continued luring customers to online shopping.

Additionally, the impacts of the growing proliferation of Internet use and online payment apps globally are expected to be reflected in the e-commerce companies’ results for the quarter under review.

Apart from online retail companies, the Internet-Commerce industry houses online travel booking companies. These stocks are expected to have continued gaining on the boom in the travel industry.

Relaxation of travel restrictions, growing confidence among the people and rising summer travel demand are expected to have bolstered bookings of online travel stocks during the second quarter. Moreover, increased consumer demand for travel industry-related services might have been a positive.

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 relatively 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 with the maximum chance 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%.

Our Bets

Four e-commerce stocks mentioned below have the right combination of elements to beat on earnings this reporting cycle:

China-based Alibaba BABA has an Earnings ESP of +6.19% and currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is scheduled to report first-quarter fiscal 2024 results on Aug 10. The Zacks Consensus Estimate for its earnings has moved up 1.6% to $1.90 per share in the past 30 days.

Seattle, WA-based Amazon AMZN has an Earnings ESP of +2.99% and currently carries a Zacks Rank #3.

The company is scheduled to report second-quarter 2023 results on Aug 3. The Zacks Consensus Estimate for its earnings has been stable at 34 cents per share over the past 30 days.

Norwalk, CT-based Booking Holdings BKNG has an Earnings ESP of +1.67% and currently carries a Zacks Rank #3.

The company is scheduled to report second-quarter 2023 results on Aug 3. The Zacks Consensus Estimate for its earnings has moved up 1.5% to $28.82 per share in the past 30 days.

Boston, MA-based Wayfair W has an Earnings ESP of +2.37% and currently carries a Zacks Rank #3.

The company is scheduled to report second-quarter 2023 results on Aug 3. The Zacks Consensus Estimate for its loss is pegged at 67 cents per share, which has narrowed down from a loss of 73 cents per share in the past 30 days.

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

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

Wayfair Inc. (W): Free Stock Analysis Report

Booking Holdings Inc. (BKNG): Free Stock Analysis Report

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