Online Retail: Amazon Trouble a Signal of Trouble for Other Online Retailers?
According to a note from Goldman, the company's sales may grow 38% from last year to $17.9 billion. That figure misses analysts expectations of $18.2 billion.
Because Amazon in the U.S.'s largest online retailer, and usually outpaces holiday e-commerce spending growth, a dip in sales may serve as an indicator for the online retail market as a whole.
Bloomberg reports data from ComScore.com, which showed Amazon has historically outpaced other online retailers by 23%.
In addition to a variety of products available on Amazon's site, Amazon also sells its Kindle line. The retailer said it sold "well over" 1 million kindles per week in December, with demand led by its Kindle Fire tablet (via Bloomberg). If Amazon is still losing out, given its additional revenues from Kindles, other e-commerce retailers may be in trouble.
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So, how could this trend affect other online retailers?
To find out we created a list of popular online retailer trading on the U.S. market exchanges.
Do you think these names will take a hit? (Click here to access free, interactive tools to analyze these ideas.)
1. Amazon.com: Operates as an online retailer in North America and internationally. Market cap of $79.08B. The stock is currently stuck in a downtrend, trading -6.62% below its SMA20, -14.08% below its SMA50, and -14.01% below its SMA200. The stock has performed poorly over the last month, losing 10.44%.
2. E-Commerce China Dangdang (NAS: DANG) : Operates as a business-to-consumer e-commerce company in the People's Republic of China. Market cap of $340.07M. The stock is currently stuck in a downtrend, trading -7.72% below its SMA20, -18.4% below its SMA50, and -62.99% below its SMA200. It's been a rough couple of days for the stock, losing 5.51% over the last week.
3. eBay (NAS: EBAY) : Provides online marketplaces for the sale of goods and services, as well as other online commerce, platforms, and online payment solutions to individuals and businesses in the United States and internationally. Market cap of $39.26B. The stock has gained 7.23% over the last year.
4. IAC/InterActiveCorp. (NAS: IACI) : Engages in the Internet business in the United States and internationally. Market cap of $3.49B. Relatively low correlation to the market (beta = 0.61), which may be appealing to risk averse investors. The stock has gained 42.03% over the last year.
5. Overstock.com (NAS: OSTK) : Operates as an online retailer offering discount brand, non-brand, and closeout merchandise in the United States. Market cap of $180.89M. The stock is a short squeeze candidate, with a short float at 10.71% (equivalent to 18.87 days of average volume). The stock has lost 53.61% over the last year.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
List compiled by Eben Esterhuizen, CFA. Kapitall's Eben Esterhuizen does not own any of the shares mentioned above. Rebecca owns shares of AMZN.Short data sourced from Yahoo! Finance.
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