2 E-commerce Stocks to Watch Among This Week’s Earnings Report Releases

Two e-commerce giants will be among the 175 companies on the S&P 500 to release their reports this week. The tech sector as a whole has released reports from 49.6% of its market cap, with earnings down 6%.

E-commerce stocks are picking up speed as younger generations continue to shop on line. A growing mobile segment has also helped many companies boost their bottom lines. Two industry leaders releasing their reports this week include:

  1. eBay (EBAY)

eBay has consistently outperformed and shocked analysts in Q4 2015 with earnings up 6.98% on the quarter. The leader in online auctions, eBay has done its best to diversify with an initiative to collect user data and increase its artificial intelligence to enhance user experience.

The company has also turned to social media to boost its traffic, which led to the Q4 surprise last year.

eBay’s separation from PayPal (PYPL) caused the company growth concerns, and forecasts point to revenue growth of 3% to 5% on the quarter. The company is scheduled to release their earnings report tomorrow after trading closes for the day.

  1. Amazon (AMZN)

Amazon is the biggest Internet retailer in the world. The company announced earlier in the month the rollout of its monthly service for Amazon Prime, which allows for monthly subscriptions instead of yearly subscriptions for its service. The move will position the company to better compete against movie streaming services that charge monthly for their services.

Amazon Video, part of Amazon Prime, offers movie streaming for all Amazon Prime members along with two-day free shipping and several other benefits. Amazon also launched a standalone streaming service that is $1 cheaper than Netflix (NTFX) and is a direct competitor.

Expenditures will be a concern heading into the company’s earnings report release as analysts expect increased growth of Amazon’s cloud-based services. Expansion of this services eats away at the company’s bottom line despite strong growth in the sector.

Overall, we expect Amazon’s retail sales to perform well, but rising costs may be a dark spot for the company.

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Daniel Simmons