The e-commerce market is rapidly expanding, owing to the growth of online marketplaces, and the increasing adoption of innovative strategies like livestream selling, dropshipping, AI-driven personalization, and social media sales are creating exciting growth opportunities for the industry.
Amid this backdrop, investors could scoop up shares of fundamentally stable e-commerce stocks, Chewy, Inc. (CHWY), CarGurus, Inc. (CARG), and Revolve Group, Inc. (RVLV).
Easier access to the internet, convenience, and changing consumer preferences have rapidly changed the e-commerce market. The number of users in the e-commerce market in the U.S. has been growing and is projected to grow consistently until 2029, reaching a peak of 333.5 million users, an increase of 21.9% from 2024.
Additionally, social media platforms like Instagram are utilizing mobile shopping trends, while brands are offering impressive discounts to attract potential customers. From groceries and essentials to even cars, e-commerce is now the go-to choice for consumers.
According to a study by Grand View Research, the global e-commerce market is projected to reach $83.26 trillion by 2030, growing at an impressive CAGR of 18.9%.
Now let us dive deep into the fundamentals of three e-commerce stocks, starting with #3.
Stock #3: Chewy, Inc. (CHWY)
CHWY is engaged in the pure play e-commerce business. It offers pet food and treats, pet supplies and pet medications, and other pet-health products through its retail websites and mobile applications.
CHWY’s trailing-12-month ROCE of 130.34% is significantly higher than the industry average of 10.60%. Its trailing-12-month ROTC of 7.31% is 17.4% higher than the sector average of 6.22%. Likewise, the stock’s trailing-12-month asset turnover ratio of 3.88x is 289.5% higher than the industry average of 1.00x.
For the fiscal 2025 third quarter that ended October 27, 2024, CHWY’s net sales increased 4.8% year-over-year to $2.88 billion. Its income from operations amounted to $25.63 million, compared to a loss from operations of $9.72 million the previous year’s quarter.
Moreover, adjusted net income and adjusted EPS attributable to common Class A and Class B stockholders grew 33.8% and 33.3% from the year-ago value to $84.92 million and $0.20, respectively.
Analysts expect CHWY’s revenue and EPS for the fiscal 2025 fourth quarter that ended in January to increase 13% and 10.4% year-over-year to $3.20 billion and $0.20, respectively. Moreover, the company has surpassed the consensus revenue estimates in all of the four trailing quarters.
CHWY’s shares surged 61.2% over the past six months and 160% over the past nine months to close the last trading session at $38.98.
CHWY’s POWR Ratings reflect its sound fundamentals. The stock has an overall rating of B, translating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
CHWY has a B grade for Quality. Within the Consumer Goods industry, it is ranked #12 out of 55 stocks.
To access CHWY’s Sentiment, Growth, Momentum, Value, and Stability ratings, click here.
Stock #2: CarGurus, Inc. (CARG)
CARG is an online automotive platform for buying and selling vehicles. The company has two segments: U.S. Marketplace and Digital Wholesale. It offers an online automotive marketplace for customers to search for new and used car listings from its dealers and sell their car to dealers and other consumers and more.
On November 4, 2024, CARG unveiled a new digital retail solution to power more seamless and efficient connections between dealers and purchase-ready shoppers in Canada. The new offering enables consumers to complete most of the car buying process online and connects dealers with ready-to-buy shoppers and simplifies the sales process.
For the fiscal 2024 third quarter that ended September 30, CARG’s total revenue increased 5.4% year-over-year to $231.36 million. Its non-GAAP gross profit rose 13.4% from the year-ago value to $192.40 million.
Additionally, its non-GAAP net income and on-GAAP net income per share attributable to common stockholders grew 2.8% and 32.4% from the prior year’s quarter to $47.06 million and $0.45, respectively.
Street expects CARG’s revenue and EPS for the fiscal 2024 fourth quarter that ended in December to increase 3.9% and 48% year-over-year to $231.79 million and $0.52, respectively. Additionally, the company has surpassed consensus EPS estimates in all of the four trailing quarters.
Shares of CARG surged 57.9% over the past six months and 74.5% over the past nine months to close the last trading session at $39.20.
CARG’s POWR Ratings reflect its robust prospects. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
CARG has an A grade for Growth and a B for Quality. Within the A-rated Internet industry, it is ranked #13 out of 47 stocks.
In addition to the POWR Rating highlighted above, you can check CARG’s ratings for Value, Stability, Sentiment, and Momentum here.
Stock #1: Revolve Group, Inc. (RVLV)
RVLV is an online fashion retailer for millennial and generation z consumers. The company has two segments: REVOLVE and FWRD. It offers apparel, footwear, accessories, beauty, and home products from emerging, established, and owned brands, as well as luxury brands through its websites and mobile apps.
On November 12, 2024, RVLV announced a partnership with League One Volleyball, the largest brand in youth volleyball. The partnership allows the company to strategically merge fashion and sports, creating fresh opportunities to engage customers and drive brand growth.
For the fiscal 2024 third quarter that ended September 30, RVLV’s net sales increased 9.9% year-over-year to $283.15 million. Its income from operations rose significantly from the year-ago value to $14.25 million.
Moreover, the company’s net income and EPS grew 238.3% and 275% year-over-year to $10.75 million and $0.15, respectively.
The consensus revenue and EPS estimate of $283.22 million and $0.10 for the fiscal 2024 fourth quarter that ended December 2024 reflect a year-over-year rise of 9.9% and 18.3%, respectively. Additionally, the company has surpassed consensus EPS estimates in all four trailing quarters.
RVLV’s shares have surged 27.2% over the past three months and 58.6% over the past nine months to close the last trading session at $31.58.
RVLV’s stable fundamentals are mirrored in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
RVLV has an A grade for Growth and a B for Quality. Within the Consumer Goods industry, it is ranked #13 out of 55 stocks.
Click here to access RVLV’s Value, Stability, Sentiment, and Momentum ratings.
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CHWY shares were trading at $38.56 per share on Monday afternoon, down $0.42 (-1.08%). Year-to-date, CHWY has gained 15.14%, versus a 2.28% rise in the benchmark S&P 500 index during the same period.
About the Author: Aritra_Gangopadhyay
Aritra is a financial journalist dedicated to breaking down complex financial topics into simple, actionable insights. Holding a Master’s degree in Economics, he uses his analytical expertise to help investors uncover unique opportunities for long-term success.
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