In this article, we discuss the 15 internet retail stocks to buy now. If you want to read about some more internet retail stocks, go directly to 5 Internet Retail Stocks To Buy Now.
Recession headwinds and macro fears have failed to stop the incredible growth of the internet retail sector in the past few months. According to a report by investment bank Morgan Stanley, global ecommerce sales remain on track to reach 27% of retail sales by 2026. The industry, per the bank, still has plenty of room for growth. This finding is backed by data models that predict the market size of the ecommerce industry could increase from $3.3 trillion in 2022 to $5.4 trillion in 2026, growing at a brisk compound annual growth rate.
Some of the biggest beneficiaries of this boom in internet retail are likely to be Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), and PayPal Holdings, Inc. (NASDAQ:PYPL). Elite investors, like hedge funds, already hold positions in these firms, despite recent share pullbacks due to a slowing economy. In the coming months, internet retail sales in sub-sectors like beauty, apparel, and grocery are likely to grow even further, leading to more brick-and-mortar store closures.
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Our Methodology
The companies that operate in the internet retail sector were selected for the list. The analyst ratings of these firms and the latest updates related to them are also discussed to provide some additional context. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Internet Retail Stocks To Buy Now
15. Waterdrop Inc. (NYSE:WDH)
Number of Hedge Fund Holders: 1
Waterdrop Inc. (NYSE:WDH) provides online insurance brokerage services to match and connect users with related insurance products underwritten by insurance companies in the People’s Republic of China. On August 22, Waterdrop Inc declared that it has become a member of the United Nations Global Compact. It is the world’s largest corporate sustainability initiative.
On September 16, Morgan Stanley analyst Jenny Jiang upgraded Waterdrop Inc. (NYSE:WDH) stock to Overweight from Equal Weight with a price target of $2.10, up from $2, highlighting that the company’s revenue continued to recover sequentially, and its earnings have been positive for the past three quarters.
At the end of the third quarter of 2022, 1 hedge fund in the database of Insider Monkey held stakes worth $59,000 in Waterdrop Inc. (NYSE:WDH), compared to 1 in the previous quarter worth $95,000.
Just like Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), and PayPal Holdings, Inc. (NASDAQ:PYPL), Waterdrop Inc. (NYSE:WDH) is one of the top internet retail stocks to buy according to elite investors.
14. FIGS, Inc. (NYSE:FIGS)
Number of Hedge Fund Holders: 20
FIGS, Inc. (NYSE:FIGS) operates as a direct-to-consumer healthcare apparel and lifestyle company in the United States. On November 10, Figs posted earnings for the third quarter of 2022, reporting earnings per share of $0.02 in line. The revenue over the period was $128.6 million, up 25.2% compared to the revenue over the same period last year and beating market estimates by $4.23 million.
On November 17, Oppenheimer analyst Jason Helfstein maintained an Outperform rating on FIGS, Inc. (NYSE:FIGS) stock and lowered the price target to $12 from $22, noting that the company reported better-than-expected third-quarter results but lowered guidance for the rest of 2022.
At the end of the third quarter of 2022, 20 hedge funds in the database of Insider Monkey held stakes worth $94.4 million in FIGS, Inc. (NYSE:FIGS), compared to 21 in the previous quarter worth $111.6 million.
In its Q3 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and FIGS, Inc. (NYSE:FIGS) was one of them. Here is what the fund said:
“Within our Disruptive Growth group, some companies depreciated. New position FIGS, Inc. (NYSE:FIGS) declined about 15%. The relatively new direct-to-consumer producer of healthcare apparel has declined along with the broader group of young, high-growth, publicly traded companies. Investors have continued to shun newer business models that they perceive to be riskier. The company has declined over 80% from its highs achieved in late 2021. The recent volatility created an opportunity for us to initiate and build a position in a company that we believe can continue to grow revenue above 20% annually while also expanding margins. Its superior product is competing against brands that lack investment capabilities to improve their offerings. We believe Figs could command a meaningful share of the $79 billion global healthcare apparel market and eventually develop products for other professions.”
13. Chewy, Inc. (NYSE:CHWY)
Number of Hedge Fund Holders: 25
Chewy, Inc. (NYSE:CHWY) engages in the pure play e-commerce business in the United States On October 20, Chewy unveiled that it is expanding its insurance and wellness offerings, CarePlus, using new plans provided by Lemonade’s (NYSE:LMND) pet health insurance products.
On November 21, Deutsche Bank analyst Lee Horowitz maintained a Buy rating on Chewy, Inc. (NYSE:CHWY) stock and raised the price target to $50 from $40, noting that CPI data for the pet category increased 14% year-on-year in the third quarter, indicating likely strong NSPAC growth for the company.
At the end of the third quarter of 2022, 25 hedge funds in the database of Insider Monkey held stakes worth $303.6 million in Chewy, Inc. (NYSE:CHWY), compared to 25 in the preceding quarter worth $288.5 million.
In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Chewy, Inc. (NYSE:CHWY) was one of them. Here is what the fund said:
“We exited our position in Chewy, Inc. (NYSE:CHWY), in the consumer discretionary sector. While we continue to have a favourable opinion of the online pet products retailer, we decided to consolidate our exposure to the pet industry.”
12. Coupang, Inc. (NYSE:CPNG)
Number of Hedge Fund Holders: 36
Coupang, Inc. (NYSE:CPNG) owns and operates an e-commerce business through its mobile applications and Internet websites primarily in South Korea. On November 9, Coupang posted earnings for the third quarter of 2022, reporting earnings per share of $0.05. The revenue over the period was $5.1 billion, up 9.9% compared to the revenue over the same period last year.
On October 7, HSBC analyst Junhyun Kim initiated coverage of Coupang, Inc. (NYSE:CPNG) stock with a Buy rating and a $27.80 price target.
Among the hedge funds being tracked by Insider Monkey, Dallas-based investment firm Maverick Capital is a leading shareholder in Coupang, Inc. (NYSE:CPNG) with 81 million shares worth more than $1.35 billion.
In its Q3 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Coupang, Inc. (NYSE:CPNG) was one of them. Here is what the fund said:
“Coupang, Inc. (NYSE:CPNG), the largest e-commerce platform in South Korea, contributed after reporting a sizable beat on second-quarter earnings and raising annual EBITDA guidance. Upside was concentrated in e-commerce, where Coupang is now driving sequential margin expansion while maintaining a growth rate that is triple that of the industry average, lending credence to the investment case that Coupang will consolidate the fragmented e-commerce industry in Korea across both general merchandise and grocery, with healthy long-term margins to follow.”
11. DoorDash, Inc. (NYSE:DASH)
Number of Hedge Fund Holders: 41
DoorDash, Inc. (NYSE:DASH) operates a logistics platform that connects merchants, consumers, and dashers in the United States and internationally. On November 4, DoorDash said that it was introducing a new in-app safety feature, SafeChat, to help ensure delivery people on its platform are safe during and after the delivery. If the delivery is taking longer than expected, the app will automatically check to see if the delivery person is okay.
On November 7, DA Davidson analyst Tom White maintained a Neutral rating on DoorDash, Inc. (NYSE:DASH) stock and lowered the price target to $60 from $82, highlighting the company’s strong third-quarter results.
Among the hedge funds being tracked by Insider Monkey, Beijing-based investment firm Hillhouse Capital Management is a leading shareholder in DoorDash, Inc. (NYSE:DASH) with 4.7 million shares worth more than $232 million.
10. eBay Inc. (NASDAQ:EBAY)
Number of Hedge Fund Holders: 42
eBay Inc. (NASDAQ:EBAY) operates marketplace platforms that connect buyers and sellers in the United States and internationally. On November 8, eBay revealed that it has priced a $1.15 billion underwritten public offering of its senior unsecured notes.
On November 3, investment advisory Benchmark maintained a Buy rating on eBay Inc. (NASDAQ:EBAY) stock and lowered the price target to $62 from $66. Analyst Daniel Kurnos issued the ratings update.
At the end of the third quarter of 2022, 42 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in eBay Inc. (NASDAQ:EBAY), compared to 43 in the preceding quarter worth $1.3 billion.
In its Q3 2022 investor letter, Smead Capital Management, an asset management firm, highlighted a few stocks and eBay Inc. (NASDAQ:EBAY) was one of them. Here is what the fund said:
“Two things are very noticeable right off the top. First, sometimes you have to be happy losing less in a bear market environment so that you have more of your capital to grow in the next bull market. We are never really happy losing money. Second, 2022 is likely to be our third year of existence as a fund to lose money for the year. This year would join 2008 and 2018 in this undistinguished category. Our biggest detractors were dominated by eBay (NASDAQ:EBAY). Consumer/investor fears about media and e-commerce hit WBD and EBAY and profit taking in Amgen came from early 2022 strength.”
9. Etsy Inc. (NASDAQ:ETSY)
Number of Hedge Fund Holders: 45
Etsy Inc. (NASDAQ:ETSY) operates two-sided online marketplaces that connect buyers and sellers primarily in the United States, the United Kingdom, Germany, Canada, Australia, France, and India. On November 3, Deutsche Bank analyst Lee Horowitz maintained a Hold rating on Etsy (NASDAQ:ETSY) stock and raised the price target to $95 from $85, noting that the company posted better-than-expected sales and a meaningful beat on EBITDA and margins in the third quarter.
At the end of the third quarter of 2022, 45 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Etsy Inc. (NASDAQ:ETSY), compared to 29 in the previous quarter worth $595.9 million.
In its Q3 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Etsy Inc. (NASDAQ:ETSY) was one of them. Here is what the fund said:
“Stock selection in the consumer discretionary sector proved a tailwind to performance. Etsy (NASDAQ:ETSY), which operates several online marketplaces for craft and artisan goods, delivered second-quarter results that demonstrated the company’s pricing power, cash flow generation, and margin upside remain intact. While Etsy is experiencing declines in gross merchandise sales, it is seeing better-than-expected take rates and improved margins. We believe the company is well-positioned to grow advertising spending on its marketplace, bring in new buyers and strengthen its e-commerce advantages.”
8. Sea Limited (NYSE:SE)
Number of Hedge Fund Holders: 55
Sea Limited (NYSE:SE) engages in digital entertainment, e-commerce, and digital financial service businesses in Southeast Asia, Latin America, the rest of Asia, and internationally. On November 16, Sea Limited shares jumped as much as 41% after the firm posted better than expected third-quarter financial results. The company said that it will renew its focus on profitability instead of outright growth in the coming months.
On November 17, Morgan Stanley analyst Mark Goodridge maintained an Overweight rating on Sea Limited (NYSE:SE) stock and lowered the price target to $95 from $116, noting that the company’s third quarter reported a strong beat on cost and a clear pathway to profitability for Shopee.
At the end of the third quarter of 2022, 55 hedge funds in the database of Insider Monkey held stakes worth $2.4 billion in Sea Limited (NYSE:SE), compared to 65 in the previous quarter worth $2.7 billion.
In its Q1 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Sea Limited (NYSE:SE) was one of them. Here is what the fund said:
“Sea Limited (NYSE:SE), a global digital gaming and e-commerce company, detracted from performance for the period held. Similar to other online consumer businesses, Sea faced significant multiple compression in the quarter, exacerbated by a slowdown in user growth at its key Free Fire digital game and mounting investments in its e-commerce operation, particularly in new markets like Brazil. We exited our position as we lost confidence in the long-term unit economics in some of Sea’s new markets and were concerned by the simultaneous slowdown in revenue growth and increase in underlying cash burn.”
7. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Holders: 62
Shopify Inc. (NYSE:SHOP) is a commerce company that provides a commerce platform and services worldwide. On November 16, PayPal, a payments company, said that it had launched Return Shopping, providing a new revenue stream for Shopify merchants by driving consumers to the merchant’s e-commerce storefronts within the return process.
On November 15, Moffett Nathanson analyst Michael Morton initiated coverage of Shopify Inc. (NYSE:SHOP) stock with a Market Perform rating and $30 price target, noting that it is expected that the e-commerce sector will continue to grow at a historical pace and its peak is yet to come.
Among the hedge funds being tracked by Insider Monkey, St. Petersburg, Florida-based investment firm ARK Investment Management is a leading shareholder in Shopify Inc. (NYSE:SHOP) with 14.5 million shares worth more than $391.5 million.
In its Q3 2023 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Shopify Inc. (NYSE:SHOP) was one of them. Here is what the fund said:
“Shopify Inc. (NYSE:SHOP) is a leading e-commerce platform supporting over 2 million merchants with software, online storefronts and payments technology. Like Uber, Shopify returned to the mid-cap territory during Q2 as the company’s profit cycle and share price faced significant pressure. Earlier this year, the company began a phase of investments to support a range of future growth drivers, including Shopify Plus for larger brands, logistics services, international expansion, point-of-sale payments and social media-based commerce. With high inflation putting pressure on consumer spending, and with e-commerce activity normalizing after a massive pandemic spike, Shopify’s earnings have fallen sharply. While we have outstanding questions about the likelihood of success for the company’s capital-intensive logistics investments, we decided to take advantage of the stock’s >75% YTD decline and initiate a GardenSM position at a deep discount to our PMV estimate. Our thesis is predicated on our belief there is still a long runway for commerce to move online, and Shopify is well-positioned to win a share of this market. The company has created an ecosystem of products (payment processing, financing, shipping, customer engagement tools, etc.), partners (TikTok, Google, Meta), sales channels and over 6,000 apps to help its merchants sell online and establish direct relationships with customers.”
6. JD.com, Inc. (NASDAQ:JD)
Number of Hedge Fund Holders: 67
JD.com, Inc. (NASDAQ:JD) provides supply chain-based technologies and services in the People’s Republic of China. On November 22, JD.com stated that it cut salaries for about 2,000 managers by 10% to 20% and diverted some of those savings toward a $1.4 billion employee benefits fund.
On November 21, Barclays analyst Jiong Shao maintained an Overweight rating on JD.com, Inc. (NASDAQ:JD) stock and raised the price target to $72 from $59, noting that the firm’s total revenue showed double-digit year-over-year growth and the operating margins tripled year-over-year against one of the worst economic backdrops in recent memory.
At the end of the third quarter of 2022, 67 hedge funds in the database of Insider Monkey held stakes worth $3.7 billion in JD.com, Inc. (NASDAQ:JD), compared to 62 in the preceding quarter worth $5.5 billion.
In addition to Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), and PayPal Holdings, Inc. (NASDAQ:PYPL), JD.com, Inc. (NASDAQ:JD) is one of the top internet retail stocks to buy according to elite investors.
In its Q3 2021 investor letter, Argosy Investors, an asset management firm, highlighted a few stocks and JD.com, Inc. (NASDAQ:JD) was one of them. Here is what the fund said:
“We sold JD.com, Inc. (NASDAQ:JD) as a result of the furor over Chinese stocks during the quarter. We had been concerned about China’s lack of respect for investor rights for some time, and Beijing has become significantly more aggressive in asserting itself of late. In addition, the legal structure Chinese companies use to come public in the U.S., a Cayman Islands shell corporation leaves American investors with an unsure path to recovering value should these companies cease to trade on U.S. exchanges. Because of the uncertainty, we exited our position in JD completely. We still love JD’s long-term prospects, but we cannot estimate the legal/regulatory risk associated with these companies anymore. More broadly, we are freeing up cash for some other positions we already own which have declined in this market, and after additional review, remain attractive.”
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Disclosure. None. 15 Internet Retail Stocks To Buy Now is originally published on Insider Monkey.