Wrapping up Q2 earnings, we look at the numbers and key takeaways for the online retail stocks, including Coupang (NYSE:CPNG) and its peers.
Consumers ever rising demand for convenience, selection, and speed are secular engines underpinning ecommerce adoption. For years prior to Covid, ecommerce penetration as a percentage of overall retail would grow 1-2% annually, but in 2020 adoption accelerated by 5%, reaching 25%, as increased emphasis on convenience drove consumers to structurally buy more online. The surge in buying caused many online retailers to rapidly grow their logistics infrastructures, preparing them for further growth in the years ahead as consumer shopping habits continue to shift online.
The 6 online retail stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was 1.3% below.
Luckily, online retail stocks have performed well with share prices up 17.5% on average since the latest earnings results.
Coupang (NYSE:CPNG)
Founded in 2010 by Harvard Business School student Bom Kim, Coupang (NYSE:CPNG) is a South Korean e-commerce giant often referred to as the "Amazon of South Korea".
Coupang reported revenues of $7.32 billion, up 25.4% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company:: Although Coupang beat analysts' EPS expectations this quarter, its number of customers and revenue missed Wall Street's estimates.
“This quarter we continued to see deeper levels of engagement from our customers, powered by our relentless focus on providing even greater levels of selection, service, and savings for customers,” said Gaurav Anand, CFO of Coupang.
Coupang scored the fastest revenue growth of the whole group. The company reported 21.7 million active buyers, up 11.9% year on year. Unsurprisingly, the stock is up 24.3% since reporting and currently trades at $25.69.
Is now the time to buy Coupang? Access our full analysis of the earnings results here, it’s free.
Best Q2: Carvana (NYSE:CVNA)
Known for its glass tower car vending machines, Carvana (NYSE:CVNA) provides a convenient automotive shopping experience by offering an online platform for buying and selling used cars.
Carvana reported revenues of $3.41 billion, up 14.9% year on year, outperforming analysts’ expectations by 4.6%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates.
Carvana pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 51.7% since reporting. It currently trades at $202.20.
Is now the time to buy Carvana? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Wayfair (NYSE:W)
Launched in 2002 by founder Niraj Shah, Wayfair (NYSE: W) is a leading online retailer for mass market home goods in the US, UK, Canada, and Germany.
Wayfair reported revenues of $3.12 billion, down 1.7% year on year, falling short of analysts’ expectations by 2%. It was a disappointing quarter as it posted a miss of analysts’ buyer estimates and slow revenue growth.
Wayfair delivered the weakest performance against analyst estimates and slowest revenue growth in the group. The company reported 22 million active buyers, up 0.9% year on year. As expected, the stock is down 18.5% since the results and currently trades at $44.36.
Read our full analysis of Wayfair’s results here.
Chewy (NYSE:CHWY)
Founded by Ryan Cohen who later became known for his involvement in GameStop, Chewy (NYSE: CHWY) is an online retailer specializing in pet food, supplies, and healthcare services.
Chewy reported revenues of $2.86 billion, up 2.6% year on year. This print was in line with analysts’ expectations. It was a strong quarter as it also put up an impressive beat of analysts’ EBITDA estimates.
The stock is up 4.3% since reporting and currently trades at $26.93.
Read our full, actionable report on Chewy here, it’s free.
Revolve (NYSE:RVLV)
Launched in 2003 by software engineers Michael Mente and Mike Karanikolas, Revolve Group (NASDAQ: RVLV) is a next generation fashion retailer that leverages social media and a community of fashion influencers to drive its merchandising strategy.
Revolve reported revenues of $282.5 million, up 3.2% year on year. This print topped analysts’ expectations by 1.9%. Zooming out, it was a satisfactory quarter as it also logged an impressive beat of analysts’ EBITDA estimates but slow revenue growth.
The company reported 2.58 million active buyers, up 4.8% year on year. The stock is up 41.5% since reporting and currently trades at $24.87.
Read our full, actionable report on Revolve here, it’s free.
Market Update
Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and them to your watchlist. These companies are posied for grow regardless of the political or macroeconomic climate.
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