Yahoo Finance Canadian E-Commerce Giants: 2 Stocks Gaining Momentum
Written by Jitendra Parashar at The Motley Fool Canada
The Canadian stock market roller coaster could continue in the near term, as growing macroeconomic concerns and the possibilities of a looming recession are still keeping investors on edge. This is one of the key reasons why, despite rallying more than 7% in January 2023, the main TSX benchmark has struggled to maintain these advances lately and currently trades with 5% year-to-date gains.
Nonetheless, some beaten-down e-commerce stocks from 2022 are outperforming the market by a huge margin this year, as their strong fundamental outlook is helping them regain investors’ confidence. In this article, I’ll highlight two such rallying Canadian e-commerce stocks that you can buy now to hold for years to come.
My first Canadian e-commerce stock pick
My first Canadian e-commerce stock pick, Shopify (TSX:SHOP), is a no-brainer for growth investors who want to gain from the surging demand for digital commerce. The Waterloo-headquartered e-commerce giant currently has a market cap of $80.3 billion, as its stock has seen 34% year-to-date gains to trade at $63.05 per share.
A massive selloff in SHOP stock started in the first half of 2022 when inflation pressures and aggressive interest rate hikes triggered a tech sector-wide crash. In addition, gradually subsiding pandemic-driven demand for its e-commerce services further pressured Shopify’s share prices.
On the positive side, the ongoing financial growth trends of this Canadian e-commerce company still look impressive. In the March quarter, it registered a 25.3% year-over-year revenue growth to beat analysts’ estimates. Notably, this was the third consecutive quarter when Shopify’s top and bottom lines exceeded Street’s estimates. Despite short-term economic challenges, the company’s continued cost-cutting efforts and focus on expanding its range of innovative commerce offerings make it a great e-commerce stock to own for the long term.
While SHOP stock has already recovered sharply in 2023, it’s still down nearly 64% from its 2021’s closing price of $174.17 per share, making it look attractive to buy now.
My second e-commerce stock pick for 2023
Nuvei (TSX:NVEI) could be another amazing e-commerce stock to consider in Canada right now. If you don’t know it already, this Montréal-headquartered company provides payment technology services to merchants and currently has a market cap of $7.6 billion.
Last year, Nuvei generated nearly 55% of its revenue from its Europe, Middle East, and Africa segment, and North America accounted for nearly 40% of its total sales. Despite the macroeconomic challenges, the company posted a strong 16.4% year-over-year growth in its 2022 revenue. In addition, it’s focusing on expanding its global market presence by launching its payment services in new key geographical markets and making quality acquisitions. This could be the reason why Street analysts expect Nuvei’s revenue-growth rate to improve significantly in the ongoing year.
After tanking by 58% in 2022, NVEI’s share prices have jumped more than 60% in 2023 so far to currently trade at $55.70 per share. But despite its positive long-term growth outlook, its current market price is down about 33% from its 2021’s closing level, making it one of my favourite e-commerce stocks to buy at a bargain right now.
The post Canadian E-Commerce Giants: 2 Stocks Gaining Momentum appeared first on The Motley Fool Canada.
Should You Invest $1,000 In Nuvei?
Before you consider Nuvei, you'll want to hear this.
Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in April 2023... and Nuvei wasn't on the list.
The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 21 percentage points. And right now, they think there are 5 stocks that are better buys.
See the 5 Stocks * Returns as of 4/18/23
More reading
Brookfield Asset Management Spin-Off: What Investors Need to Know
Passive Income: 4 Safe Dividend Stocks to Own for the Next 10 Years
The Motley Fool has positions in and recommends Nuvei and Shopify. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.
2023
