3 Undervalued E-Commerce Stocks to Buy and Hold Through 2030

E-commerce stocks were among the hottest names to buy during the pandemic. With the rise of online shopping, some of the best e-commerce stocks were trading at high valuations. But the tables have turned in the post-pandemic world, and as growth corrects to the downside, e-commerce stocks have fallen sharply. As always, markets tend to react to extremes, and e-commerce stocks now appear undervalued. This column focuses on three undervalued e-commerce stocks worth buying and holding through 2030.

The important point is that the global e-commerce industry is expected to grow steadily. The global e-commerce market is projected to grow at a CAGR of 16.9% between 2023 and 2030, and will be worth $21.2 trillion by the end of the decade.

That’s why some of the top e-commerce companies have a lot of room to grow. I analyzed undervalued e-commerce stocks focused on emerging markets like China, Southeast Asia, and other developing Asian countries. Given the relatively underpenetrated market, the growth potential of the ideas discussed is significant.

Coupon (CPNG)

Buying (NYSE:CPNG) the stock hit a 52-week low of $13.50 in February. Since then, the stock has traded 60% higher and I expect the uptrend to continue. The key factor is improving business fundamentals.

In Q1 2024, Coupang saw healthy revenue growth of 23% year-over-year to $7.1 billion. The acquisition of Farfetch supported revenue growth. Another big positive is that the company’s active customer base in its product commerce segment grew by 16% to 21.5 million.

Coupang has recorded free cash flow of $1.5 billion over the past 12 months. Key business and financial metrics are therefore encouraging. As we expand into emerging Asia and Southeast Asia, I expect continued growth in active users and cash flow.

From a margin perspective, Coupang expects Farfetch to achieve positive adjusted EBITDA by the end of 2024. Although EBITDA margin declined in the first quarter, the long-term trend is likely to be upward.

Sea Limited (SE)

After reaching a peak of $360 in October 2021. The Sea Limited (NYSE:Southeast) the stock was in a slump and hit 52-week lows of $32.3 in January. However, there has been a sharp reversal from those levels, with SE shares trading at $72. It seems clear that the e-commerce stock has bottomed out. Based on the growth and expansion of EBITDA margins, I expect the uptrend to continue in the coming years.

It is worth noting that Sea Limited’s concerns were not related to revenue growth. The company operates in the attractive Southeast Asian market.

However, SE shares fell sharply due to significant cash burn on a sustained basis. Finally, there seems to be some good news, with Q1 2024 adjusted EBITDA of $401.1 million. Thanks to operating leverage, the e-commerce segment’s EBITDA is likely to continue to improve. With integrated logistics capabilities as a differentiating factor, the outlook for the e-commerce business is bullish.

Sea Limited ended Q1 2024 with a strong cash buffer of USD 8.6 billion. This provides great flexibility to improve the quality of services in the e-commerce segment and drive technological advancement in the digital financial services business.

JD.com (JD)

JD.com (NASDAQ:JD) is a Chinese e-commerce stock that is trading at a significant valuation gap. The projected P/E ratio of 8.2 indicates limited downside but significant upside potential. JD stock also offers a dividend yield of 2.84%.

Despite regulatory and macroeconomic headwinds, JD.com grew revenue at a CAGR of 19% from 2018 to 2023. Diversification is expected to continue this healthy growth.

In the first quarter of 2024, JD Retail saw revenue growth of 7% year-on-year. JD Logistics saw revenue growth of 15% during the same period. JD is also investing in new businesses, and these early-stage companies are setting the stage for growth over the next five years.

In 2023, JD.com recorded a free cash flow of 40.7 billion renminbi. This provides great flexibility for capital investment and dividends. Therefore, the fundamentals are strong and the current valuation does not reflect the growth potential and value creation.

As of the date of publication, Faisal Humayun 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.