Since the onset of the COVID-19 pandemic, the e-commerce industry has witnessed steady growth, across a range of segments, including necessities and luxuries. While non-store retail sales declined 8.7% in December due to surging prices, the resurgence of COVID-19 cases could boost e-commerce companies’ performance in the coming months.
Furthermore, as e-commerce companies introduce advanced technologies to their platforms to attract more consumers, the industry should generate increasing sales in the coming quarters. According to Grand View Research, the global B2C e-commerce market is expected to grow at a 9.7% CAGR through 2028.
Given this backdrop, Wall Street analysts expect Overstock.com, Inc. (OSTK), ThredUp Inc. (TDUP), and Rent the Runway, Inc. (RENT) to each gain more than 100% in price in the coming months. Thus, these stocks could be solid additions to one’s watchlist.
Overstock.com, Inc. (OSTK)
OSTK is an online retailer in the United States. The Salt Lake City, Utah company operates through the Retail, tZERO, and Medici Ventures segments. The company was also the first major retailer to accept cryptocurrency as a form of payment.
On Oct. 28, 2021, OSTK CEO Jonathan Johnson said, “Our continued focus on foundational operational improvements allowed us to execute on our disciplined strategy of consistently fulfilling customers' needs to create their dream home. Online penetration of the home furniture and furnishings market remains strong and appears to be sticking as customers recognize the broad assortment, value, and ease of shopping for home furniture and furnishings online.”
OSTK’s consolidated net income increased 43.3% year-over-year to $30.43 million for its third quarter, ended Sept. 30, 2021. Its EPS was $0.63, up 26% year-over-year. Moreover, its total assets were $1.06 billion for the period ended Sept. 30, 2021, compared to $830.21 million for the period ended Dec. 31, 2020.
Analysts expect OSTK’s revenue and EPS to grow 10.9% and 28.1%, respectively, year-over-year to $3.12 billion and $2.92 for its fiscal 2022. It surpassed the Street’s EPS estimates in each of the trailing four quarters. The stock closed yesterday’s trading session at $47.04. Wall Street analysts expect the stock to hit $118.20 in the near term, which indicates a potential 151.3% upside.
ThredUp Inc. (TDUP)
TDUP operates online resale platforms that allow consumers to buy and sell secondhand women's and kids' apparel, shoes, and accessories. The Oakland, Calif.-based company has processed more than 125 million unique secondhand items from 35,000 brands across 100 categories.
On November 8, 2021, James Reinhart, CEO and co-founder at TDUP, said, “Supply continues to appear endless, demand for secondhand is increasing with more first-time buyers trying thredUP, and we’re doubling down on infrastructure investments so we can continue providing our buyers with a vast and ever-changing selection of great brands at great prices.”
For the third quarter, ended Sept. 30, 2021, TDUP’s total revenue came in at $63.27 million, up 34.8% year-over-year. Its gross profit came in at $46.09 million, up 40.6% year-over-year. In addition, the company’s total assets were $350.22 million for the period ended Sept. 30, 2021, compared to $142.91 million for the period ended Dec. 31, 2020.
TDUP’s revenue is expected to be $332.92 million in its fiscal 2022, representing a 33.7% year-over-year rise. The company’s EPS is also expected to increase 37.2% for fiscal 2022. It closed yesterday’s trading session at $9.93. Wall Street analysts expect the stock to hit $27.57 in the near term, which indicates a potential 177.6% upside.
Rent the Runway, Inc. (RENT)
RENT in Brooklyn, N.Y., is the world’s first and largest shared designer closet platform. It rents designer dresses, clothing, and accessories for women through its stores and online. Through it, customers can subscribe, rent items a-la-carte and shop resale from over 780 designer brands.
Jennifer Hyman, CEO and Co-Founder of RENT, stated, “We delivered significant growth across subscribers and revenue and improved our gross margins. As a leader in clothing subscription and rental with a differentiated operating platform and deep competitive advantages, we believe these metrics are clear indicators of our ongoing business re-acceleration.”
RENT’s net total revenue increased 66.2% year-over-year to $59 million for its fiscal third quarter, ended Oct. 31, 2021. The company’s total current assets came in at $289.7 million for the period ended Oct. 31, 2021, compared to $103.4 million for the period ended Jan. 31, 2021. Its total assets were $478.4 million, compared to $320.7 million for the same period.
For its fiscal 2023, analysts expect RENT’s revenue to be $304.79 million, representing a 50.6% year-over-year rise. The company’s EPS is also expected to increase 29.8% for its fiscal 2023. It closed yesterday’s trading session at $5.05. Wall Street analysts expect the stock to hit $22.89 in the near term, which indicates a potential 353.3% upside.
OSTK shares were trading at $47.60 per share on Wednesday afternoon, up $0.56 (+1.19%). Year-to-date, OSTK has declined -19.34%, versus a -3.60% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
3 E-Commerce Stocks Wall Street Predicts Will More Than Double StockNews.com
