MELI - 3 E-Commerce Stocks That Could Be the Next Amazon
2024-07-10 13:03:56 ET
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I believe e-commerce stocks will continue their resurgence in the second half of 2024. The likely catalyst for this move will be interest rate cuts tied to falling inflation. If borrowers have just a little more wiggle room, it’s reasonable to expect that online shoppers will come back will full force and start buying in increasing volumes.
However, buying the right e-commerce stocks is easier said than done. Companies in this sector have been on a rollercoaster ride in the post-pandemic world, especially if you move past the top e-commerce bets.
There are still some e-commerce stocks that have very high growth and are valued at attractive prices. I think such stocks could follow in the footsteps of Amazon (NASDAQ: AMZN ) and dominate the e-commerce space in their respective regions. Here are three to look into.
MercadoLibre (MELI)
MercadoLibre (NASDAQ: MELI ) is a leading e-commerce and fintech powerhouse in Latin America. The company just celebrated its 25th anniversary, and I believe it’s well-positioned for the next 25 years of growth.
The company’s latest earnings report certainly supports my bullish thesis. Revenue rose 42.7% year-over-year to a record $4.33 billion , crushing estimates by more than $466 million. Meanwhile, earnings per share of $6.78 trounced expectations by more than a dollar.
What’s driving this phenomenal performance? CEO Martin de los Santos highlighted MercadoLibre’s thriving marketplace businesses in Brazil and Mexico, which both posted gross merchandize value (GMV) growth of around 30%, despite macro headwinds. Strategic investments in logistics infrastructure and well-executed marketing campaigns are clearly paying dividends. I believe the company’s e-commerce revenue will continue to grow at particularly high rates.
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Mercadolibre’s fintech division also shined, with total payment volume surging 133% to $1.9 billion on the back of 1.5 million new credit cards issued. While a weak Argentine peso remains a drag, the overall business looks very healthy to me.
With e-commerce and digital payments adoption still in the early innings across Latin America, I’m confident MercadoLibre can sustain this momentum. The stock may look pricey, but I believe the long-term upside for this e-commerce player is still huge.
Sea (SE)
Sea (NYSE: SE ), Singapore’s tech darling, posted another strong quarter. The stock has rebounded significantly, but the question is whether the company can maintain this momentum.
In Q1 2024, Shopee achieved record-high orders, GMV, and revenue, with gross orders surging 57% year-over-year . It’s clear that Shopee is capitalizing on the e-commerce boom in Southeast Asia, where it has become the go-to online shopping destination for millions of users.
The platform’s integrated logistics arm, SPX Express, delivered 70% of orders in Asia within three days. Increased logistics efficiency is driving down costs and boosting customer satisfaction.
However, I can’t ignore the elephant in the room: rising competition. Shopee may be the market leader now, but rivals like Lazada and Tokopedia are nipping at its heels. There are also concerns about Sea’s ability to sustain its rapid growth and profitability as it expands into new markets.
Despite these challenges, I remain optimistic about Sea’s prospects. With Garena and SeaMoney firing on all cylinders, and Shopee continuing to gain market share, Sea is well-positioned to ride the wave of digitalization in Southeast Asia. While there may be bumps in the road, I believe Sea has what it takes to become the next e-commerce giant. The stock has bounced back, surging nearly 90% year-to-date.
Kaspi.kz (KSPI)
Kaspi.kz (NASDAQ: KSPI ) is a fintech powerhouse revolutionizing how Kazakhs bank, shop and pay through its sleek Super App. Its Super App also covers the e-commerce space.
I’ve been closely watching Kaspi since its splashy $17.5 billion Nasdaq debut . The company features 14 million monthly users tapping into its mobile-first platform. Considering Kazakhstan’s population is less than 20 million, this innovator has clearly cracked the code on the digital-first fintech model. Digital payments in Kazakhstan are set to soar to $14.3 billion by 2028 , and Kaspi is perfectly poised to ride this mega trend to new heights. Notably, the company’s margins are also stellar.
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However, KSPI stock has faced some turbulence, with a 7% sell-off after devastating floods hit Kazakhstan in April. Kaspi also faces some macro headwinds investors need to factor in. The Kazakh central bank aims to break the oligopoly of the two largest banks ( including Kaspi ) in the payments space with a new universal system next year.
JPMorgan (NYSE: JPM ) believes this cooldown is a buying opportunity, given Kaspi’s performance so far. The company continues to post strong results, with Q1 revenue jumping 40% year-over-year. Moreover, analysts remain overwhelmingly bullish, and I’m inclined to agree.
On the date of publication, Omor Ibne Ehsan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Omor Ibne Ehsan is a writer at InvestorPlace. He is a self-taught investor with a focus on growth and cyclical stocks that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as cryptocurrencies and penny stocks. You can follow him on LinkedIn .
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