3 E-Commerce Stocks (Not Amazon) Worth Owning for the Long Run

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Ask 100 investors what the biggest e-commerce stock in the US is and most will say: Amazon (NASDAQ:AMZN) It’s so obvious.

In 2024, the company is expected to generate $248 billion in online sales, $21 billion in store sales, and $172 billion in third-party seller commissions, for a total of $441 billion, up 12.5% ​​from $392 billion in 2023. It has few competitors with such large revenues.

While Amazon stock is a great choice if you want to invest in it for the long term, it doesn’t hurt to consider buying shares of other e-commerce companies that are also benefiting from global online sales.

Finally, a blog post from April 2024. Online shop (NYSE:STORE) estimates that global e-commerce sales will grow from $4.98 trillion in 2021 to $7.96 trillion in 2027, a compound annual growth rate (CAGR) of 8.1%.

If my business could grow by 8% per year, I would be very happy. But I digress. The important thing is that e-commerce is still a very profitable business.

Here are three e-commerce stocks Global X E-commerce ETF (NASDAQ:EBIZ) to benefit from the second wave.

Williams Sonoma (WSM)

Williams Sonoma (NYSE:WSM) is EBIZ’s third largest investment with a 5.13% stake. WSM shares are up almost 50% YTD and 378% over the past five years.

I have argued for years that Williams-Sonoma is one of the best omni-channel retailers in the world because it perfectly combines brick-and-mortar sales with online operations.

The furniture and home goods retailer has pivoted to e-commerce in recent years. In 2023, its e-commerce business would account for 66% of its $7.75 billion in net revenue. That’s significantly higher than when I first wrote about the stock in June 2016. Back then, e-commerce accounted for about 53% of revenue.

How does this affect profitability?

In 2016, the company’s operating profit was $472.6 million, which means an operating margin of 9.3%. In 2023, the company’s operating profit was $1.5 billion, which means an operating margin of 17.3% and is 800 basis points higher.

I would say e-commerce has done a lot for profitability. That’s why WSM remains one of the best e-commerce stocks to buy.

MercadoLibre (MELI)

MercadoLibre (NASDAQ:MELIA) is the 15th largest EBIZ company with a share of 3.32%. MELI shares are up almost 9% since the beginning of the year and 169% over the past five years.

MercadoLibre is a combination of e-commerce and fintech business.

In Latin America, this is crucial because access to banks is much lower than in the U.S. It was launched in 1999 as MercadoLibre.com. It currently has one of the five highest market capitalizations of e-commerce companies in the world. It also has one of the 60 largest market capitalizations of technology companies in the world.

I recommended this company’s stock back in May 2013, and although I’ve become a big fan of Amazon, I still admire what it does in Latin America, where the business environment is much more difficult than in America.

At the time, it had $472.6 million in revenue, most of which came from MercadoLibre Marketplace. Fast-forward to 2023. It generated revenue from two segments: trading and financial technology. The former brought in $2.39 billion in revenue (34%), up 41.2% from 2022, while the latter brought in $4.73 billion (66%), up 32.6% from the year before.

Part e-commerce, part fintech, total money-making machine.

Shopify (SHOP)

Shopify is EBIZ’s 22nd largest stock with a 2.50% stake. SHOP shares are down nearly 20% year-over-year and up 79% over the past five years.

Shopify stock was on a straight up trajectory until the end of 2021. Since then, it’s been mostly misery mixed with a bit of good news. As a result, of the 51 analysts covering the stock, only 30 rate it a “buy” (59%), with a $76.20 price target, almost 30% higher than the current one, so there’s hope.

On July 22, CIBC analyst Todd Coupland reiterated his “buy” rating on the stock, setting a price target of $85, which is even better than the median.

When the company reported its first-quarter 2024 results in May, CEO Harley Finkelstein made some optimistic statements about the company’s future. Cantech Letter Finkelstein reported in the following comments:

“You’re seeing the strongest version of Shopify in our history. Our strong first-quarter results are a clear testament to our commitment to the new Shopify, our commitment to operating with a consistent-sized team, and our focus on building for the long term to deliver both growth and profitability.”

I would buy once Q2 2024 results are released on August 7th.

As of the date of publication, Will Ashworth did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are the author’s own, subject to InvestorPlace.com Publication Guidelines.

On the date of publication of this article, the editor in charge did not hold (directly or indirectly) any interests in the securities referred to in this article.

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