Shopify stock is tanking. Check these 14 other high-growth ecommerce companies.

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Shopify had a blowout fourth quarter, with sales rising 41% from a year earlier, the company reported Wednesday.

Sales are the main objective of a company working at the forefront of the shift to ecommerce. But Shopify’s stock fell as much as 19%, even after company reported results that came ahead of analysts’ expectations for revenue and earnings.

Read: Shopify sees a sales slowdown in the first half of 2022. The stock is sinking.

The above headline from Barron’s spells out the problem in this market environment for any highly valued tech stock: Even in a growing economy with better-than-expected retail sales, if a company’s own sales outlook for the months ahead disappoint investors, the stock can crash.

While we cannot predict which highly valued ecommerce companies might be next to disappoint investors, we can look ahead to see which are expected to increase sales the most quickly. A list of these expected rapid-growers derived from the holdings of three ecommerce exchange-traded funds is below.

A high valuation in a touchy market

Here’s a three-year price chart for Shopify Inc. SHOP through the close on Feb. 15 — that is, before the company announced its fourth-quarter results:

FactSet

The stock was up fivefold for three years before Shopify put out its fourth-quarter results. And the stock was trading for 14.5 times the consensus forward sales estimate among analysts polled by FactSet. That’s a very high valuation when compared with a price/sales valuation of 2.6 for the S&P 500 SPX and 2.9 for a venerable internet services highflyer such as Amazon.com Inc. AMZN.

Investors were paying through the nose for Shopify’s stock. Then again, the stock had traded as high as 47.1 times the consensus forward sales estimate in July 2020.

Three ecommerce ETFs

In order to come up with a list of ecommerce stocks for a screen, we looked at three ETFs focusing on this industry group:

  • The ProShares Online Retail ETF ONLN has $581 million in assets under management and holds 39 stocks. It is heavily concentrated, with Amazon making up 25% of the portfolio and Alibaba Group Holding Ltd. BABA the second-largest holding at 13.6%. The third-largest holding is eBay Inc. EBAY, at 4.5%.
  • The Amplify Online Retail ETF IBUY has $475 million in assets, holds 79 stocks. The individual stocks are equal-weighted within the portfolio, which itself is 70% weighted to the U.S. According to FactSet, this approach “keeps giants [such as] Amazon from dominating the basket, but also introduces a bias to smaller and possibly more risky firms.”
  • The Global X E-Commerce ETF EBIZ has $151 million in assets. It holds 40 stocks and has a modified weighting by market capitalization. Its top five holdings make up 13.1% of the portfolio. Expedia Group Inc. EXPE is the largest holding, at 6.7%, followed by Booking Holdings Inc. BKNG at 6.4% and JD.com Inc. JD at 5.5%.

Leaving the ETFs in size order, here are projected compound annual growth rates (CAGR) for sales per share through 2023, based on consensus estimates among analysts polled by FactSet:

ETF Ticker Two-year estimated sales CAGR Estimated revenue per share – 2021 Estimated revenue per share – 2022 Estimated revenue per share – 2023
ProShares Online Retail ETF ONLN 7.9% $34.50 $37.39 $40.19
Amplify Online Retail ETF IBUY 12.3% $49.79 $56.60 $62.74
Global X E-Commerce ETF EBIZ 10.0% $16.60 $18.35 $20.09
Source: FactSet
Ecommerce stock screen

Together, the three ETFs hold 78 stocks. Among those, 63 are covered by at least five analysts polled by FactSet for estimates, ratings and price targets.

Here are the 15 companies analysts expect to achieve the highest sales CAGR through calendar 2023. The consensus sales estimates are in millions of U.S. dollars.

Company Ticker Country Two-year estimated sales CAGR Estimated sales – 2021 Estimated sales – 2022 Estimated sales – 2023
Ozon Holdings PLC ADR OZON Cyprus 59.8% 2,349 $4,017 $5,998
Global-e Online Ltd. GLBE Israel 53.0% $240 $367 $563
Dada Nexus Ltd. ADR DADA-US China 52.6% $1,105 $1,686 $2,573
Sea Ltd. (Singapore) ADR Class A SE Singapore 41.4% $9,656 $14,251 $19,299
Jumia Technologies AG ADR JMIA Germany 39.8% $170 $227 $332
Uber Technologies Inc. UBER U.S. 38.7% $17,560 $27,430 $33,769
Shopify Inc. Class A SHOP Canada 34.0% $4,573 $6,093 $8,214
MercadoLibre Inc. MELI-US Uruguay 33.6% $6,971 $9,352 $12,443
TripAdvisor Inc. TRIP U.S. 32.5% $909 $1,373 $1,595
Trip.com Group Ltd. ADR TCOM China 31.2% $3,088 $3,869 $5,319
FIGS, Inc. Class A FIGS United States 30.9% $419 $547 $717
Pinduoduo, Inc. Sponsored ADR Class A PDD China 30.8% $15,388 $20,251 $26,320
Booking Holdings Inc. BKNG United States 30.2% $10,838 $15,722 $18,384
Carvana Co. Class A CVNA United States 29.6% $12,575 $16,488 $21,134
Source: FactSet

You can click on the tickers for more about each company.

Then read Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

Leaving the list in the same order, here’s a summary of analysts’ opinions about the stocks:

Company Ticker Share “buy” ratings Share neutral ratings Share “sell” ratings Closing price – Feb. 15 Cons. Price target Implied 12-month upside  potential
Ozon Holdings PLC ADR OZON-US 57% 36% 7% $22.23 $41.41 86%
Global-e Online Ltd. GLBE 100% 0% 0% $39.42 $72.44 84%
Dada Nexus Ltd. ADR DADA 92% 8% 0% $10.85 $35.61 228%
Sea Ltd. (Singapore) ADR Class A SE 96% 4% 0% $149.55 $320.59 114%
Jumia Technologies AG ADR JMIA 14% 72% 14% $9.70 $18.88 95%
Uber Technologies Inc. UBER 90% 10% 0% $37.09 $62.67 69%
Shopify Inc. Class A SHOP 51% 46% 3% $889.50 $1,484.62 67%
MercadoLibre Inc. MELI 83% 17% 0% $1,170.30 $1,789.86 53%
TripAdvisor Inc. TRIP 26% 53% 21% $30.07 $35.80 19%
Trip.com Group Ltd. ADR TCOM 79% 15% 6% $30.42 $31.97 5%
FIGS Inc. Class A FIGS 73% 27% 0% $19.40 $36.36 87%
Pinduoduo, Inc. Sponsored ADR Class A PDD 76% 22% 2% $61.23 $99.21 62%
Booking Holdings Inc. BKNG 56% 41% 3% $2,635.16 $2,739.52 4%
Carvana Co. Class A CVNA 60% 36% 4% $142.50 $290.74 104%
Souce: FactSet

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This article was originally published by Marketwatch.com. Read the original article here.

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