CARG: 3 Small-Cap E-Commerce Stocks with Buy Ratings

The global e-commerce market is expected to grow at a CAGR of 14.7% between 2020 and 2027. Last year was especially bountiful for e-commerce companies due to the spread of the coronavirus pandemic and the resulting societal lockdowns. Consumers took their shopping online for health and safety reasons, helping e-commerce companies thrive.

Since global coronavirus infection rates are continuing to increase and the pace of vaccine rollouts has been slower than expected, analysts expect the E-commerce industry to remain on solid footing this year. Analysts have noted that smaller e-commerce companies have been big winners over the past year. This may be because smaller companies are more agile and quicker to adopt creative solutions as consumer behavior changes.

Small-cap e-commerce companies CarGurus, Inc. (CARG), 1-800-FLOWERS.COM, Inc. (FLWS), and iMedia Brands, Inc. (IMBI) have indeed recorded stellar stock price gains in the recent past. These companies are on a strong trajectory for growth. So, we think t’s worth adding these stocks to your portfolio.

CarGurus, Inc. (CARG)

CARG operates an online platform for the sale of new and used cars. The platform connects buyers with sellers using third-party validation. CARG’s stock has gained 50.4% over the past three months.

CARG recently completed the acquisition of CarOffer. The acquisition will add wholesale vehicle acquisition and sale capabilities to the company. CARG also recently launched Finance in Advance, which enables shoppers’ pre-qualification for financing while buying a car.

For the quarter ended September 30, 2020, CARG saw a 17% increase in its advertising revenue versus the same period last year. The company had no debt as of September 2020.

CARG is expected to see a revenue growth of 18.9% in 2021. Its EPS is estimated to grow 6.9% in 2021 and at a rate of 27.4% per annum over the next five years.

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CARG’s strong fundamentals are reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

The stock has an overall rating of B, which equates to Buy in our proprietary ratings system. It has a grade of A for Quality. In the 65-stock Internet industry, it is ranked #2.

In total, we rate CARG on eight different levels. Beyond what we stated above, we have also given CARG grades for Stability, Sentiment, Momentum, Growth, and Value. Get all the CARG ratings here.

1-800-FLOWERS.COM, Inc. (FLWS)

FLWS operates an online platform for the sale of flowers and related products. The company offers fresh-cut flowers, floral and fruit arrangements, gift baskets, cookies, and more. FLWS’s stock price has increased 100.3% over the past year.

FLWS has launched a new platform for corporate gifting, which integrates the offerings of its entire family of brands. This dedicated website for corporate gifting has the potential to become a market leader in its niche.

For the quarter ended December 31, 2020, the company reported an increase in revenue of 44.8% versus the same period last year. The company’s adjusted EBITDA for the quarter increased 48.4% during the same period.

FLWS’s revenue is estimated to increase 48.1% for the quarter ended March 31, 2021 and 35% in 2021. Its EPS is expected to rise 71.6% in 2021 and 20% per year over the next five years.

It is no surprise that FLWS has an overall rating of B, which equates to Buy in our POWR Ratings system. FLWS has a grade of A for Quality. In the Internet industry, it is ranked #13.

In addition to the POWR Ratings grades I have just highlighted, you can Click here to see additional POWR Ratings for FLWS (Growth, Value, Stability, Momentum, and Sentiment).

iMedia Brands, Inc. (IMBI)

IMBI operates several online and offline marketplaces in the U.S. The company sells products through television, online, mobile, and social media. Its offerings include electronics, home care, cook ware, and more. Over the past year, the company’s stock has returned 86.6%.

IMBI recently announced the launch of 16 new brands across various product categories. The new brands will be premiered on IMBI’s three television networks. The company has also begun the retail distribution of its Shaq branded products.

For the quarter ended October 31, 2020, IMBI’s active customer file grew 4% compared to the same period last year. Its net loss during the quarter was $4.7 million, which was an improvement of $2 million versus the same period last year.

IMBI’s revenue is expected to grow 13.5% for the quarter ended January 31, 2021 and 16.8% in 2021. Its EPS growth is expected to be 108.2% in 2021 and 21.8% per annum over the next five years.

IMBI’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary ratings system. IMBI has a grade of B for Sentiment. In the Internet industry, it is ranked #7.

Beyond what we stated above, we also have given IMBI grades for Stability, Momentum, Quality, Growth and Value. Get all the IMBI ratings here.

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CARG shares were trading at $35.16 per share on Monday afternoon, up $0.60 (+1.74%). Year-to-date, CARG has gained 10.81%, versus a 4.45% rise in the benchmark S&P 500 index during the same period.

About the Author: Aaryaman Aashind

Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks. More...