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3 E-Commerce Stocks in Focus Amid Expected Strong Holiday Sales

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We are in the fourth quarter of an eventful 2024 and market researchers' attention has shifted toward the holiday sales season of 2024-25. Several research firms have already projected the upcoming holiday seasons retail sales. 

Although physical or in-house store sales are expected to be muted and may even decline year over year, online or e-commerce sales are likely to be bright spot this year. Under this scenario, investors should focus on internet-commerce stocks for the near to mid term. Three such stocks are: Amazon.com Inc. (AMZN - Free Report) , Wayfair Inc. (W - Free Report) and Travelzoo (TZOO - Free Report) . 

Strong Online Holiday Sales Projections

Adobe has estimated 2024 holiday sales from Nov. 1 through Dec. 31 to reach a record-high $240.8 billion, up 8.4% year over year. More significantly, mobile transactions will account for 53.2% of total online sales, rising 12.8% year over year. 

Mastercard SpendingPulse forecast total retail sales from Nov 1 to Dec 24, 2024 to increase 3.2% year over year. Within this, online retail sales are likely to advance 7.1% annually. 

Deloitte’s retail and consumer products practice projects holiday sales will total $1.58 trillion to $1.59 trillion between November 2024 to January 2025. This indicates a year-over-year rise of 2.3-3.3%. E-commerce sales are expected to grow 9% year over year to reach between $289 billion and $294 billion.

EMARKETER projected that holiday sales during the November-December period will grow 4.8% annually to hit $1.353 trillion. However, online sales are expected climb 9.5% year over year. Salesforce predicts a 2% year-over-year increase in 2024 holiday sales to $272 billion.

3 E-Commerce Stocks to Watch for Holiday Season

These three e-commerce stocks have strong growth potential for the rest of 2024. Moreover, these stocks have solid price upside left in the short-term. Each of these stocks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The chart below shows the price performance of three e-commerce stocks in the past three months.

Zacks Investment Research
Image Source: Zacks Investment Research

Amazon.com Inc.

Amazon is pushing ahead with its devices strategy. Alexa powered Echo devices are going great guns and helping the company sell products and services. Artificial intelligence (AI) driven Alexa has already been integrated into a host of everyday devices for a digital home, which has converted the nascent smart home market into a potential area of growth in a very short time. 

Moreover, AMZN is benefiting from an increasing number of Alexa-compatible smart devices. AMZN is racing to build an ecosystem around Alexa and it’s safe to say that it has taken an early lead over Google's smart assistant.

Amazon is the leading provider of cloud infrastructure as a service to enterprise customers. The expanding customer base of Amazon Web Services (AWS) driven by its strengthening cloud offerings, will continue to aid AMZN’s dominance in the global cloud space. 

Excellent Price Upside Potential for AMZN Shares

Amazon has an expected revenue and earnings growth rate of 10.4% and 63.5%, respectively, for the current year. The average price target of brokerage firms represents an increase of 21.3% from the last closing price of $180.80. The brokerage target price is currently in the range of $200-$265.

Wayfair Inc.

Wayfair is benefiting from growing momentum across active customers, owing to lower costs and increasing customer and supplier loyalties. W’s strengthening market share, driven by broad availability and fast delivery of products, is a plus. W’s strong momentum across repeat customers is a tailwind. A solid momentum in mobile app orders is contributing well. Strength in W’s fulfillment solutions and supplier advertising is a major positive.

Impressive Price Upside Potential for W Stock

Wayfair has an expected revenue and earnings growth rate of 5% and more than 100%, respectively, for next year. The average price target of brokerage firms represents an increase of 15.7% from the last closing price of $56.32. The brokerage target price is currently in the range of $42-$100.

Travelzoo

Travelzoo is an Internet media company. TZOO is engaged in the provision of information to subscribers and website users about travel, entertainment and local deals available from companies. TZOO’s operating segment consists of Asia Pacific, Europe and North America.

Enormous Price Upside Potential for TZOO Stock

Travelzoo has an expected revenue and earnings growth rate of 2.3% and 21.3%, respectively, for the current year. The average price target of brokerage firms represents an increase of 77.2% from the last closing price of $11.88. The brokerage target price is currently in the range of $12-$35.


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