Amazon stocks are slow growing

The historic defeat of Amazon.com Inc. stocks last week highlights how difficult the e-commerce stock environment has become after the pandemic boom.

Etsy Inc., Wayfair Inc., and Shopify Inc. are rushing towards this week’s earnings report, behind Amazon’s worst sold-outs since 2006. Slow down the growth of e-commerce.

“This is a canary in the mine,” said Oktay Kavrak, director and product strategist at Leverage Shares. “If Amazon hits a speed bump, other names could crash. People were hoping for a slowdown in growth after the pandemic, but expecting a dramatic drop as we’ve seen. I don’t think I did. “

The ferocious rally e-commerce stocks seen at the height of the COVID-19 blockade in 2020 reversed as consumers returned to pre-pandemic habits and inflation cooled spending. Amazon executives said they are watching over whether shoppers will cut back on purchases to offset rising prices as fuel and labor costs bite.

Etsy plunged 58% this year, the third worst performer in the S & P 500 index, and Wayfair fell 60%. Shopify has just recorded the worst month on record and is the biggest loser in Canada’s S & P / TSX Composite Index this year. All of these stocks widened their decline on Monday.

Despite its relentless sold-out, dip buyers were hard to come by. It may be related to how expensive they are still. Shopify has traded 128 times its expected profit over the next 12 months, with Wayfair multiples close to 95, but Etsy’s number is 21. This shows that pricing continues in preparation for rapid growth. This is compared to about 17 on the S & P 500 and 21 on the Nasdaq 100.

However, analysts are holding back expectations for future quarterly results. Wayfair’s revenue was projected to decline by about 15% this quarter, but Shopify’s expected growth of 26% was at least the lowest since 2014, according to data compiled by Bloomberg.

Etsy will report on May 4, and Wayfair and Shopify will announce the results on May 5.

According to data compiled by Bloomberg, Shopify’s average revenue consensus has fallen by about 9% over the past week. For Etsy, its average revenue forecast has fallen 2.6% in the past month and almost 30% in the last 90 days. That revenue estimate fell by more than 9% in the previous quarter.

Despite short-term risks, some remain bright about future growth. Poonam Goyal, Senior Retail Analyst at Bloomberg Intelligence, has a positive outlook on the long-term outlook for e-commerce.

“We are very bullish on e-commerce. E-commerce should be able to grow with double-digit clips over the next few years,” she said in a telephone interview. “Comparison is easy only from here.”

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