2 e-commerce stocks with upside potential of up to 210%, according to Wall Street
The COVID-19 pandemic has precipitated a drastic consumer shift towards online shopping. With this, the e-commerce industry has witnessed a surge in the number of customers, with retail sales of all kinds of devices increasing continuously. Consumer spending on e-commerce is expected to reach a record $1 trillion this year. And the resurgence of COVID-19 cases in some countries is expected to further boost e-commerce sales.
Retailers announced the opening of 8100 stores this year, more than double the number of locations they closed last year. Although this may hamper the overall growth of the e-commerce industry, rapid digitization, the increase in the number of smartphone users and the growing adoption of e-commerce platforms by businesses could maintain the momentum of the industry. ‘industry. The global B2C e-commerce market is expected to reach $6.38 trillion by 2028, registering a CAGR of 8.97%.
Given the promising growth outlook for the industry, Wall Street analysts expect shares of fundamentally sound e-commerce company Vroom, Inc. (VRM) and Lulu’s Fashion Lounge Holdings, Inc. (LVLU) to rally in the coming months.
Vroom, Inc. (VRM)
VRM in New York is an e-commerce used car retailer in the United States. It operates an end-to-end e-commerce platform for buying, selling, transporting, refurbishing, pricing, financing, registering and delivering vehicles.
VRM recently announced its new Extended Mile hub in Statesville, North Carolina. The new Extended Mile hub, similar to VRM’s Last Mile hubs but with a wider reach, provides a more personalized driveway experience to 2.6 million people in more than 600 zip codes across North Carolina. VRM has delivered in the Statesville area since the company was founded in 2012, but now offers an experience that included a more personalized concierge service where customers advocate transporting cars directly to car buyers’ driveways on trucks brand Vroom and show them how to use their new vehicles.
During the fourth quarter, ended December 31, 2021, VRM’s total e-commerce revenue increased 159.2% year-over-year to $738.72 million. Its e-commerce gross profit rose 63.9% from its value a year ago to $32.89 million.
Analysts expect VRM revenue to grow 47.9% year-over-year to $874.13 million in the first quarter (ending March 2022).
Of the 10 Wall Street analysts who rated the stock, four rated it Buy and six rated it Hold. The 12-month median price target of $8.11 indicates a 209.54% upside potential. Price targets range from a low of $3.13 to a high of $14.00. The stock closed its last trading session at $2.62.
Lulu’s Fashion Lounge Holdings, Inc. (LVLU)
LVLU is an online retailer of women’s clothing, footwear and accessories. the Company based in Chico, CA offers dresses, tops, bottoms, bridal wear, underwear, swimwear, shoes and accessories under the Lulus brand. The Company sells its products through owned media, which primarily consists of its website, mobile app, social media platforms, email and SMS; earned media; and paid media.
LVLU’s net revenue increased 77.5% year-over-year to $96.76 million in the fourth quarter ended Jan. 2, 2022. Its gross profit increased 85.8% from its value a year ago to reach $43.43 million. His cash and cash equivalent was $11.40 million for its fiscal year ending January 2, 2022.
The consensus EPS estimate of $0.18 for the third quarter ending September 30, 2022 represents a 34.6% year-over-year improvement. Analysts expect LVLU’s revenue to grow 25.7% year over year to $133.62 million.
The four analysts who rated the stock rated it buy. The 12-month price target of $18.00 indicates a 132.3% upside potential. Price targets range from a low of $15.00 to a high of $25.00. The stock closed its last trading session at $7.75.
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Shares of VRM were trading at $2.88 per share on Monday morning, up $0.26 (+9.92%). Year-to-date, VRM is down -73.31%, compared to a -3.89% rise in the benchmark S&P 500 over the same period.
About the Author: Spandan Khandelwal
Spandan’s is a financial journalist and investment analyst specializing in the stock market. Through its ability to interpret financial data, it aims to help investors assess a company’s fundamentals before investing. Continued…