A few hours before writing this, I got an email letting me know packages had arrived at my door. It’s a recurring theme at our house and probably yours too. Increasingly, Americans are throwing in the towel on brick-and-mortar retail and ordering everything online. And as investors, that makes it worth considering what companies might be hidden gem e-commerce stocks.
The task is harder than you might think. Finding e-commerce companies isn’t hard. Nearly every company today is e-commerce. They have to be. But picking out the under-the-radar, publicly traded companies takes a little work. Fortunately, that’s what stock screeners are for.
E-commerce stocks will continue to be big winners not only in 2024 but for the foreseeable future. But surprisingly, that hasn’t meant much to Amazon (NASDAQ:AMZN) stock. That’s because the company already has a 1.75 trillion market cap. The company is becoming a venerable blue-chip stock.
That’s where a little digging can help you discover big profits. So let’s take a look at three hidden gem e-commerce stocks for you to consider.
Birkenstock (BIRK)
You may not consider Birkenstock (NYSE:BIRK) to be a hidden gem among e-commerce stocks. But the digitally native company just arrived on the publicly traded market in October 2023. That means now is the time that many investors are trying to make heads or tails of the company’s valuation.
Here’s what we know so far. Birkenstock posted mixed earnings in January with the miss being on the bottom line. The company also lowered its earnings forecast for the rest of the year citing margin pressures. However, it should be said that Birkenstock is still forecasting a year-over-year increase in earnings.
BIRK stock trades at around 39x forward earnings. That’s a significant premium from the broader retail sector. But if you compare a pair of the company’s iconic sandals to yoga pants from Lululemon (NASDAQ:LULU) which trades at 36x forward earnings, it may be fairly valued.
But an investment in BIRK stock is an investment in the future. Many people thought Lululemon would be able to hold on to its premium valuation. Yet investors have been rewarded with a gain of over 2,700% since the stock went public in 2007.
1-800-Flowers.com (FLWS)
1-800-Flowers.com (NASDAQ:FLWS) is an easy choice as one of the hidden gem e-commerce stocks. I’m writing this the day before Valentine’s Day. I imagine the company’s been generating significant revenue the past several weeks.
The reason for owning FLWS stock is because the company has a stable of premium brands that runs the gamut from flowers to gourmet snacks and foods. In fact, the company generates 48% of its revenue from gourmet foods and gift baskets. It’s a market leader in this $20 billion category.
The risk with the stock comes from the competition and seasonality. There is no shortage of companies with similar offerings. And the company makes the majority of its revenue – not to mention profitable earnings – in the quarter just ended.
Still, 1-800-FLOWERS.COM expects earnings growth of over 78% in the next 12 months. And the analysts that cover FLWS stock have a consensus price target of $12.88 which is 41% higher than the closing price on February 13, 2024.
PetMed Express (PETS)
If penny stocks fit your investment objectives and risk tolerance, PetMed Express (NASDAQ:PETS) is a name to watch. The company operates as an online pet pharmacy. There’s nothing particularly special about that. However, the company is branching into telemedicine.
That’s right. PetMed Express is partnering with Vetster to help pet owners avoid a costly trip to the vet with a virtual appointment. The company isn’t the only company looking to break into the space, but the partnership may give PetMed a first-mover advantage.
The company is growing revenue year-over-year. However, the company’s growth in the last 12 months was not enough to prevent the company from suspending its dividend. That’s something to consider. On the other hand, PetMed Express expects earnings to grow by 900% in the next 12 months. If nothing else, that should lift the stock out of penny stock territory.
On the date of publication, Chris Markoch did not have (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.
