And why two analysts say this e-commerce company is the one to buy right now.
Amazon (NASDAQ: AMZN) is the king of the online retail space. But while the stock is up just 12% so far this year, other e-retailers are far outpacing the e-commerce giant.
Shares of Etsy (NASDAQ: ETSY), Stitch Fix (NASDAQ: SFIX), and Wayfair (NYSE: W) are soaring this year and are up 47%, 85%, and 83.5%, respectively.
On Tuesday, Stitch Fix had its best day ever—jumping as much as 40% from Monday’s close—after the online personal styling company posted better-than-anticipated Q2 earnings.
“Q2 was another strong quarter for us, delivering net revenue of $370.3 million, exceeding our guidance and representing 25% year-over-year growth,” Stitch Fix founder and CEO Katrina Lake said in a company release.
“We had 6 percent higher net revenue per client than we did a year ago,” Lake told CNBC on Tuesday. “We launched our first integrated brand campaign in February to increase awareness and consideration with new and existing clients and we’re excited to connect even more people to the power of personalized styling.”
And it’s clear shoppers are catching on to Stitch Fix’s data-driven personalized styling model. The company reported 2.96 million active clients, outpacing estimates of 2.95 million, and representing 18% year-over-year growth.
Stitch Fix is dramatically changing and improving the online shopping model by leveraging data and technology for a personalized and curated shopping experience, which improves customer outcomes, lowers costs, is convenient, and saves shoppers time. With these advantages, Stitch Fix is disrupting the $1.7 trillion global apparel market is looks poised to continue to grow by leaps and bounds over the next few years.
Wayfair, meanwhile, soared 45% higher late last month on the heels of an earnings beat. On February 22, the company reported a loss of just $1.12, compared to expectations for an earnings per share loss of $1.28. Direct retail net revenue, or the sales generated through Wayfair’s various e-commerce sites, was up 40.6% year-over year to $1,995.8 million.
But S&P Global’s Erin Gibbs and Newton Advisors’ Mark Newton both say that of these three e-commerce retailers, Etsy is the top one to own now.
“I like Etsy quite a bit. … [It] has just broken out a couple of weeks ago and has really been consolidating of late,” Newton said to CNBC. He believes Etsy stock has a “much better technical cart than stocks like Stitch Fix.”
Despite Etsy’s nearly 28% climb in the last month, Newton said investors “can buy at current levels” as the stock looks like it’s heading “to the upper $70s” or maybe even “as high as $80.” As of Thursday’s close, the stock is at $69.91.
Erin Gibbs likes Etsy’s growth trajectory and upward momentum, saying “It’s earnings are just as stable as its stock price. It’s the only one that’s really growing.”
Gibbs believes that the recent gains in Stitch Fix and Wayfair can be attributed to a rebound for the sharp losses the stocks saw last quarter.
“The others are just rebounding from massive decimation of profit expectations and I would be very hesitant to get in,” she said. “Etsy is the one that really is growing steadily and actually has expanding profits.”