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Time to Buy These 3 Internet -Commerce Stocks?

Among the Zacks Rank #1 (Strong Buy) list several internet commerce stocks are standing out with earnings estimate revisions on the rise.

With the Internet-Commerce Industry currently in the top 11% of over 250 Zacks Industries here is a look at some of the top-rated stocks in the space to consider buying amid the strong start to 2023.

Alibaba BABA

Starting the list is Alibaba, which has been among the Zacks Rank #1 Strong Buys since January 18 with its stock climbing considerably during this time. Following the reopening of China’s economy, Alibaba has been one of the pack leaders among Chinese stocks that have soared over the last few months.

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Alibaba’s fiscal 2023 earnings are now expected at $7.20 per share which would be a -13% drop from a year ago but FY24 earnings are forecasted to rebound and climb 15% to $8.28 a share. Even better, earnings estimate revisions have started to go up again for FY23 with FY24 estimates up 5% over the last quarter.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Earnings estimates continuing to rise for Alibaba is a good sign as BABA stock is up +52% in the last three months to easily outpace the S&P 500’s +11%. Plus, trading around $106 a share Alibaba stock still trades attractively relative to its past at 18.5X forward earnings. This is 72% below its historical high of 66.6X and a 50% discount to the median of 36.9X another indication that there could be more upside from current levels.

JD.com JD

JD.com is another Chinese internet-commerce stock that may also have more upside with its stock skyrocketing in the past few months as well. Over the last three months, JD stock is up +30% to beat the benchmark and has been on par with the Electronic Commerce Markets +31% despite trailing Alibaba’s +52%.

More impressive, since going public in 2014, JD stock is now up +187% which has topped Alibaba’s +13% during this period and the S&P 500’s +124% and shows the company is very much a viable option in regards to E-commerce growth in China.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

With the enormous size of China’s population, there is certainly enough room for both Alibaba and JD.com as elite players in regard to direct-to-consumer product sales through their online platforms. To that note, JD.com’s earnings estimates have gone up for its current fiscal 2022 and FY23.

Fiscal 2022 earnings are now projected to climb 44% to $2.44 per share compared to EPS of $1.69 in FY21. Fiscal 2023 earnings are forecasted to rise another 14%. Trading at $57 a share and 27X forward earnings JD stock trades well below its absurd historical high of 2,100.5X and at a 60% discount to the median of 68.9X. 

 Match Group MTCH

Rounding out the list is North American-based dating platform operator Match Group which was recently added to the strong buy list along with JD.com.

With earnings estimates trending higher, Match stock is starting to stick out as MTCH is still 67% off its 52-week highs. While there is no guarantee Match will eclipse a very impressive high of $118.95 per share last February, fiscal 2023 earnings are projected to climb an impressive 72% to $2.15 per share compared to EPS of $1.25 in FY22.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Plus, FY24 earnings are projected to jump another 14% with MTCH stock trading at $48 per share and 24.4X forward earnings. This is 90% below its historical high of 249X and a 43% discount to the median of 43.2X with Match stock now up 15% over the last month to top the recent rallies in the broader indexes.

Bottom Line

With these Internet-Commerce stocks trading attractively relative to their past, the rising earnings estimate revisions are a great sign that there could still be more upside left after their recent rallies. The annual bottom line growth is also impressive and creates long-term value in addition to the near-term upside with their average Zacks Price Targets well above current levels.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

JD.com, Inc. (JD) : Free Stock Analysis Report

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

Match Group Inc. (MTCH) : Free Stock Analysis Report

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Zacks Investment Research