The COVID-19 pandemic precipitated a drastic shift by consumers toward online shopping. With that, the e-commerce industry has witnessed a steep rise in customers, with retail sales from all kinds of devices increasing continuously. Consumer spending on e-commerce is expected to hit a record $1 trillion this year. And the resurgence of COVID-19 cases in some countries should drive e-commerce sales further.

Retailers have announced the opening of 8100 store locations this year, more than twice the number of locations they closed last year. While this could hinder the overall growth of the e-commerce industry, rapid digitization, increasing smartphone users, and the rising adoption of e-commerce platforms by business enterprises could keep the industry’s momentum going. The global B2C e-commerce market is estimated to reach $6.38 trillion by 2028, registering an 8.97% CAGR.

Given the industry’s promising growth prospects, Wall Street Analysts expect the stocks of fundamentally sound e-commerce companies Vroom, Inc. (VRM - Get Rating) and Lulu’s Fashion Lounge Holdings, Inc. (LVLU - Get Rating) to rally in the coming months.

Vroom, Inc. (VRM - Get Rating)

VRM in New York City is an e-commerce used automotive retailer in the United States. It operates an end-to-end e-commerce platform for buying, selling, transporting, reconditioning, pricing, financing, registering, and delivering vehicles.

VRM recently announced its new Extended Mile hub in Statesville, N.C. The new Extended Mile hub, similar to VRM’s Last Mile hubs but with a broader reach, provides a more customized driveway experience for 2.6 million people in more than 600 ZIP codes across North Carolina. VRM has delivered in the Statesville area since the company was founded in 2012 but now provides an experience that included a more personalized concierge service where customer advocates transport cars directly to car buyers’ driveways on Vroom-branded trucks and show them how to use their new vehicles.

During the fourth quarter, ended Dec. 31, 2021, VRM’s total e-commerce revenue increased 159.2% year-over-year to $738.72 million. Its gross e-commerce profit grew 63.9% from its year-ago value to $32.89 million.

Analysts expect VRM’s revenue to increase 47.9% year-over-year to $874.13 million in the first quarter (ending March 2022).

Among the 10 Wall Street analysts that rated the stock, four rated it Buy, and six rated it Hold. The 12-month median price target of $8.11 indicates a 209.54% potential upside. The price targets range from a low of $3.13 to a high of $14.00. The stock closed its last trading session at $2.62.

Lulu’s Fashion Lounge Holdings, Inc. (LVLU - Get Rating)

LVLU is an online retailer of women’s clothing, shoes, and accessories. The Chico, Calif.-based concern provides dresses, tops, bottoms, bridal wear, intimates, swimwear, footwear, and accessories under the Lulus brand. The company sells its products through owned media, which consists primarily of its website, mobile app, social media platforms, email, and SMS; earned media; and paid media.

LVLU’s net revenue increased 77.5% year-over-year to $96.76 million in the fourth quarter, ended Jan. 2, 2022. Its gross profit grew 85.8% from its year-ago value to $43.43 million. Its cash and cash equivalent stood at $11.40 million for its fiscal year ending Jan. 2, 2022.

The  $0.18 consensus EPS estimate  for the third quarter ending Sept. 30, 2022, represents a 34.6% improvement year-over-year. Analysts expect LVLU’s revenue to increase 25.7% year-over-year to $$133.62 million.

All four analysts that rated the stock rated it buy. The 12-month price target of $18.00 indicates a 132.3% potential upside. The price targets range from a low of $15.00 to a high of $25.00. The stock closed its last trading session at $7.75.

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