By Eric J. Savitz
The e-commerce business is suddenly looking somewhat vulnerable. Growth is slowing after Covid-quarantine spikes in online shopping. Bricks-and-mortar stores are now largely reopened. Meanwhile, ongoing product shortages are complicating the picture, right on the cusp of the start of the holiday shopping season.
Adobe has estimated that online holiday sales will grow somewhere between 5% to 15%, down from last year's lockdown-driven growth of 33%.
The questions around e-commerce are showing up in recent tech earnings reports, especially over the last 24 hours.
Late Wednesday, eBay posted third quarter results that were just above Wall Street estimates and guidance. But its fourth-quarter outlook disappointed analysts, bringing fresh questions about the eBay (ticker: EBAY) growth outlook; the stock is down almost 7% on Thursday.
Aside from eBay, though, investors seem suddenly confident about e-commerce stocks.
On Thursday morning, Shopify, which provides e-commerce software used by thousands of online sellers, reported third quarter results that were below analysts' consensus estimates. Investors were apparently expecting worse, triggering short covering by some Shopify (SHOP) investors, and driving the stock up nearly 8%. Overstock (OSTK), which has shifted its business model away from end-of-life and remaindered goods toward the home furnishings sector, posted September quarter results that topped estimates, spurring a 26% move in its highly shorted stock.
The more upbeat sentiment on those e-commerce plays is driving up other high-profile players as well. Wayfair (W), which competes with Overstock in the home furnishings segment, spiked 8% on Thursday, while the pet-products seller Chewy (CHWY) is up 8%.
The best answer about the state of e-commerce could come late Thursday, when Amazon is scheduled to report results for its September quarter. Shares of Amazon are up 2.3% in Thursday afternoon trading, but the stock remains down 3.6% since the company last reported earnings on July 29.
Write to Eric J. Savitz at eric.savitz@barrons.com