Online businesses have been in the spotlight for quite some time now. Although online commerce peaked in 2021 after an unprecedented spike during the pandemic’s lockdown phase, the Commerce Department reports that e-commerce increased by more than 14 percent last year, with customers spending $870.8 billion online.
It was in line with overall retail sales, which increased 14 percent to $4.5 trillion, with e-commerce sales accounting for roughly one-fifth of all consumer spending. It also implies that buyers did not totally forsake the behaviours they formed during the pandemic’s early stages. Thus, proving the fact that consumers are still going to online markets for their buying requirements and will continue to spend larger sums of money online in the future, making investing in e-commerce companies a lucrative and robust option.
6 Canadian E-commerce Stocks You Should Invest In
Here are six e-commerce firms with the most promising growth potential for Canadian investors searching for profitable long-term investment opportunities.
Shopify Inc. (TSX:SHOP)
Shopify is a prominent provider of fundamental internet infrastructure for e-commerce growth, providing reliable tools to establish, develop, promote, and manage any size retail business. Shopify improves commerce for everyone by providing a platform and services designed for dependability while ensuring a better shopping experience for consumers worldwide. Shopify, which was started in Ottawa, powers millions of companies in over 175 countries and is trusted by brands such as Allbirds, Gymshark, Heinz, Tupperware, FTD, Netflix, FIGS, and many more.
The stock provided an ROI of 19% over the last quarter of 2021 and 31% over the previous year. Its current P/E ratio stands at 20.40, while its earnings per share are 29.24 at the moment.
Looking at the numbers, Shopify is a leader in the e-commerce sector, dominating the e-commerce space with a market capitalization of US$ 228 billion. The firm reported sales of $2,929.50 million, up 46.12% year on year (YOY), and a net income of $90.2 million for the fiscal year ended December 31, 2020. The company’s net margin for the same time was 10.91%, compared to the industry average of 4.86%. Shopify is currently trading at a 52-week low of 750 CAD, making it the best time to invest in this e-commerce platform.
Amazon.com Inc. (NASDAQ:AMZN)
Amazon.com, Inc. is a technology behemoth that sells consumer goods and subscriptions in the United States and across the world. The corporation is divided into three divisions: North America, International, and Amazon Web Services. It is a worldwide brand having 1,608,000 employees across the globe.
Amazon had $386 billion in net earnings and $578 billion in expected physical/digital online sales turnover in 2021. Retail sales account for around 80% of overall revenue, with Amazon Web Services cloud computing, storage, database, and other solutions accounting for 10% to 15%, advertising services accounting for 5%, and other income accounting for the remaining. International markets account for 25% to 30% of sales, with Germany, the United Kingdom, and Japan leading the way.
By the conclusion of the first quarter of 2021, 243 hedge funds had invested $50.4 billion in Amazon.com. It earned $15.79 per share in the first quarter of 2021, exceeding forecasts by $6.15. The company’s sales of $108.52 billion were up 43.82 percent year on year and outperformed expectations by $3.89 billion. Amazon.com has a gross profit margin of 40.48 percent and has increased 7.73 percent in the last six months and year to date.
Currently, it has a trillion-dollar market capitalization (about 1,235,682,048,349) and is the biggest online retailer in the world.
Emerge Commerce Ltd. (TSXV:ECOM)
EMERGE is a multi-faceted acquirer and operator of a lucrative niche e-commerce business. The company’s network of subscription and retail e-commerce sites offers its members access to pet items, luxury meat and groceries, outdoor gear, golf, and other experiences. WholesalePet.com, trulocal.ca, BattlBox.com, UnderPar.com, JustGolfStuff.ca, CarnivoreClub.co, WagJag.com, and BeRightBack.ca are among its e-commerce brands.
Startup 50 recognized EMERGE as one of Canada’s fastest-growing firms. It also ranked as one of the Globe and Mail’s 2020 Canada’s Top Growing Companies.
In Q4 2021, the revenue increased to a record $14.9M from $2.4M in Q4 2020, representing a 531 percent year-on-year increase, while Q4 Adjusted EBITDA increased to $1.4M from $0.1M Q4 2020, representing a 1,229 percent year-on-year gain.
Emerge generated yearly sales of $34.8M compared to $9.2M in 2020, a 278 percent increase, and annual adjusted EBITDA of $1.2M compared to $0.8M in 2020, a 53 percent increase, finishing the year with $7.8M in cash. This company’s future prospects are promising, putting it in the category of largest e-commerce companies worth investing in.
Lightspeed Commerce Inc. (TSX:LSPD)
Lightspeed Commerce Inc offers a Software as a Service (SaaS) platform that enables omnichannel commerce. Its one-stop commerce platform powers the global economy’s backbone firms and assists merchants in innovating to simplify, grow, and create excellent customer experiences. Its software package offers online stores, physical operations, multichannel sales, new location growth, worldwide payments, financial solutions, and supplier network connectivity. The platform is headquartered in Montreal and is sold through the company’s direct sales team in the United States, Canada, the Netherlands, Australia, and most of the major countries. However, the majority of its revenue comes from the United States.
On May 4, 2022, Lightspeed Commerce Inc. stated that they would be demonstrating their new Lightspeed Restaurant flagship POS and commerce platform at the 2022 Restaurant Canada Show, which will take place May 9-11, 2022. This product is supposed to transcend Lightspeed into the food market, further diversifying its portfolio and improving its profitability.
This Canadian stock has increased by 110% in the previous three quarters, and its one-year return on investment is approximately 18%. For the fiscal year ended March 31, 2021, the business reported sales of $ 221.70 million, a 45.60 percent increase year-on-year. Currently, the company holds a market capitalization of 3,946,957,834, with a healthy trading volume of 1,067,197 reflecting its profitability.
Nuvei Corporation (TSX:NVEI)
Nuvei Corp is a financial solutions provider to merchants and partners. Its versatile, adaptable, and scalable platform enables top firms to take next-generation payments, offer all payout choices, and benefit from card issuing, banking, risk, and fraud management services. It is divided into four geographical regions: North America, Europe, the Middle East, Africa; Latin America; and the Asia Pacific.
Nuvei connects businesses to their customers in over 200 markets, with local acquiring in 45+ markets, 150 currencies, and over 550 alternative payment methods, including cryptocurrencies. With one integration, Nuvei provides the technology and insights for customers and partners to succeed locally and globally.
The Canadian tech stock generated a return on investment of 26.42 percent in Q3 2021 and 34.56 percent year-to-date. The company has a market capitalization of $ 15.26 billion and is trading at a share price of $69.15. The firm reported total sales of 66.5 million CAD for the fiscal year ending December 31, 2020, up from 40.8 million CAD the previous year. The company’s debt-to-equity ratio is 14.85, lower than the industry average of 45.72.
WeCommerce Holdings Ltd. (TSXV:WE)
WeCommerce Holdings Ltd is a holding company that controls a network of Shopify partner companies and brands such as Pixel Union, Out of the Sandbox, KnoCommerce, Archetype, Yopify, SuppleApps, Rehash, Foursixty, and Stamped. The firm’s primary goal is to establish, expand, and acquire businesses that support the Shopify Partner ecosystem. These companies primarily provide Software as a Service, Digital Products, and Services. In addition, these companies create Apps and Themes and manage Agencies that assist Shopify merchants.
The stock has gained more than 307% year to date and is trading roughly 306.68% higher than its 52-week low share price of $ 2.95. (as of August 12, 2020). The firm reported C$21.28 million in revenue for the fiscal quarter (Q3 2021) ended December 31, 2020. The company reported an operating loss of C$3.02 million, up from C$0.15 million the previous year. With a market capitalization of 445.32 million CAD, it is among the few countries that grew even during the COVID-19 pandemic.
Why Invest in eCommerce Stocks in Canada?
E-commerce trends and e-commerce sales have left physical stores in the dirt. No one wants the trouble of physically going to brick-and-mortar retailers to purchase a product that they can easily order online. For this simple fact, the e-commerce industry is taking over the retail sales and stock markets.
Furthermore, with the advent of blockchain technology, web 3.0, and the technological revolution, it is evident that e-commerce or online shopping is the future of the retail industry.
The list of the largest companies in the world, in terms of market capitalization, includes Amazon and Walmart. So it further solidifies the claim that e-commerce is not ‘just in trend.’ Still, it has very real long-term prospects, making it an attractive alternative and profitable investment opportunity for investors looking for big ROIs.
The Bottom Line
The stock prices of the major e-commerce businesses are a testament to the performance of the companies on the stock market. Contrary to most predictions, e-commerce is still very much alive, so much so that physical shopping is on the verge of being put out of business. It will only grow beyond this point, so the best option is to be a part of it and enjoy huge returns.
Canadian Ecommerce Companies
Investors are looking for hot stocks, and Montreal-based Lightspeed has been an overwhelming success in its short tenure as a publicly listed company. Lightspeed is a cloud-based Point of Sale (PoS) platform for retailers and restaurants. It covers features such as inventory, loyalty and sales analysis and how Shopify is still growing in the early days of its development. Like Shopify, Lightspeed has a lot to gain from physical retailers opening stores.
While the increase of 530 percent reflects the company’s continued expansion and key M & A measures over the past year, Montreal-based Lightspeed also entered the US market via several acquisitions. In addition, his e-commerce business has also grown to $1.6 billion through a differentiated private-label portfolio, customer experience, and a new way of purchasing Canadian tires.
That leaves room for growth for a company that hit the $1 billion revenue mark in the last quarter. Over the next few years, the company is expected to boost sales and earnings through the high teens. The performance in recent years has been impressive, and this is one of the most anticipated growth rates on the list.
Looking at financial results, the stock reported revenue of $293,950 million (46.12 percent year-over-year) and a net income of $90.2 million for the year ended December 31, 2020. The company had total revenue of C $65.5 million through December 2020, compared with C $40.8 million a year earlier.
Shopify Inc. says it has more than 1,000,000 companies in 175 countries that will use its e-commerce platform for online shops and point-of-sale systems from January 2021. In 2020, Shopify announced new hires in Vancouver, Canada, due to the impact of the COVID-19 pandemic, which contributed to the increase in its share price.
In 2019, it bought Indian e-commerce company Flipkart for $1.6 billion. In May 2019, Shopify Handshake Business acquired a business-to-e-commerce platform for wholesale goods. Finally, on September 9th, 2019, the company announced the acquisition of 6 Rivers Systems, a Massachusetts-based fulfillment and buzzword company.
It is the Canadian e-commerce king, and it has richly enriched many investors who have owned their shares at high prices and multiples of their earnings. The stock has risen 110 percent in the past nine months, and its one-year return is 180 percent. Nevertheless, it has a market capitalization of C $13.53 billion and trades 21.9 percent above its 52-week low of C = 3,210 reached on July 14, 2020, and 53.4 percent below its 52-week high of C: 10,979 reached on July 6, 2021.
It was recently reported that the valuation of Shopify had increased due to an option on the company Affirm, which is due to go public shortly. Following its January 13 IPO, Shopify’s 8% stake in the company is now worth $2 billion.
Shopify, Inc. is the name of its e-commerce platform for online retail stores and point-of-sale systems in retail. Shopify is considered one of the most promising e-commerce companies.
As of September 2020, the company’s name will be on the TSX30 ranking of TSX-listed shares for the past three years. Shopify is our top tech stock of the year and is likely to be one, if not the most successful IPO the country has ever seen.
There are many ways to exploit the incredible growth in e-commerce that we are experiencing, and taking stock can be parabolic. Here are 11 of the best e-commerce stocks to buy if you want to capitalize on this unprecedented upheaval, not only in the US but in the world. Decide to invest in high-flying e-commerce stars like Canadian company Shopify.
For many of us, the COVID 19 pandemic has transformed e-commerce from convenience to necessity, changing how we do business, shop, and operate. As investors, we view 2020 as a pioneering year for e-commerce stocks.
There is a lot of upside potential now, as China has some of the best e-commerce stocks globally and is returning to normality. In due course, e-commerce will pick up where it left off, but those who have already solved their ticket to the top of Canadian e-commerce risk missing out on the next stage.
The company offers a unique platform for providers of e-commerce and mobile commerce. Smart investments in the e-commerce business could help turn it into a large share of e-commerce companies. The Californian company operates in over 30 countries and offers online auctions and classified ads.
This makes Amazon one of the best e-commerce stocks of all time. One of the good ways to exploit the e-commerce trend is in the underlying real estate.
Shopify Inc. is a multinational Canadian e-commerce company based in Ottawa, Ontario. Shopify has a balanced portfolio exposure to the IT sector of the TSX, but you don’t have to go south of the border to US technology stocks to find a more balanced portfolio.
Shopify’s management has indicated that the year’s final quarter will face challenges comparable to the previous year’s, paving the way for difficult-to-digest growth figures. TSE National Bank is covered by Lightspeed TSE after raising its target for the company’s final quarter and said management guidance for the coming quarter is better than expected. As you can see, the absence of TSX-listed technology companies has hampered the overall performance of the Canadian market.
The company’s share price has risen 15.6% over the past five years, including dividends, but one crucial thing is that the pandemic is not over, and the company is still delivering. Shares of Canadian government bonds rallied in 2020, up 35% year-on-year before the recent pullback.