Buy the best e-commerce stocks cheap now? Still possible. The crack in the growth segment is currently spreading on many different stocks. Online retail is also affected, which in some cases leads to valuations in this segment.
Today, let’s look at two e-commerce stocks that could be top picks right now. As for their assessments and where are they right now? Of course, we will also talk about that.
Top e-commerce stocks that are cheap right now: Zalando!
A first top e-commerce stock that just seems cheap is the Zalando (WKN: ZAL111). Most recently, the share certificates were apparently in free fall. It went down to a share price of 21.22 euros. Even at a price level of EUR 25.72, the equity certificates are still around 75% in the red.
But what makes the Zalando stock really cheap now? For me, that is the assessment with the wider prospects. A price-to-sales multiple of 0.6 and even a price-to-earnings ratio of around 30 is good value for Europe’s largest fashion e-commerce company. There should still be additional long-term growth potential. As well as the opportunity to expand profitability. Around € 10.4 billion in sales was compared to just € 234 million in net revenue in 2021.
Of course, the consumer climate is currently darkening. In times of inflation and rising interest rates, many consumers are likely to have other concerns than the latest fashion trends. Nevertheless, sooner or later, consumers will inevitably have to and want to buy clothes again. To take advantage of e-commerce bias of this cheap top e-commerce stock: I do not think it is unwise at this valuation measurement.
Etsy: Large niche and ecosystem
Another cheap top e-commerce stock is Etsy (WKN: A14P98). The problem of the declining consumer climate should also apply to the online retailer. Finally, management also expects increasing stagnation here, which has recently weighed on the share price, but also made valuation cheaper.
At a stock price around $ 80, the 2021 price-to-earnings ratio is only 23.5. In the meantime, we can therefore speak here of a valuation where even moderate growth can enable solid growth and returns in the longer term.
Etsy has it for sure: an online marketplace that stands out from the crowd. The selection of goods is already different with self-made and hand-made goods. But the mission of keeping e-commerce human also leads to some differences. For example, management now invests $ 25 million each year to find a satisfactory solution for the customer in case of doubt or problems.
With a total addressable market of $ 1.7 trillion, Etsy should also be a top cheap e-commerce stock now. After all, the market value is only $ 10 billion. Quite a bit for a large market and ecosystem with almost 100 million buyers and 7 million sellers.
Article Top e-commerce stocks I would buy cheap! appeared for the first time on The Motley Fool Germany.
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Vincent owns shares in Etsy and Zalando. The Motley Fool owns shares in and recommends Etsy and Zalando.
Broget Fool Germany 2022