This year has dramatically changed the consumer shopping landscape. The pandemic has altered the way we buy both essential and non-essential goods and accelerated e-commerce growth globally.
So, it stands to reason that certain consumer-related stocks should continue to benefit from the unusual shopping environment. And while many certainly have, some consumer stocks remain ripe for the picking due to their attractive valuations.
Here we look at some downright cheap large-cap consumer plays that investors should consider loading into their shopping carts.
Almost three years ago when eBay (NASDAQ:EBAY) stock was trading around $45 per share it had a forward P/E ratio around 19x. Fast forward to today and eBay is trading around $48 with forward and trailing P/E ratios of 17x and 7x, respectively. This makes the online retail pioneer one of the least expensive plays on the global consumer—and at a time when e-commerce is exploding.
Should Investors Bid on eBay Stock?
Granted, eBay doesn’t command the same premium valuation it did in the late 1990’s given Amazon’s dominance and the rising threat of competition from other global e-commerce players. But it still has room for significant multiple expansion.
While it’s no Amazon, eBay is still a force to be reckoned with in an increasingly online-centric shopping world. The company posted 22% earnings growth last year and is on pace to record similar growth in 2020. Much of the success can be attributed to eBay’s enhanced seller tools which has attracted a broader scope of retailers both in terms of size and product category.
In the near-term eBay should continue to be a major beneficiary of the pandemic economy. And a changing consumer preference to shop online will likely carry over into the post-pandemic world. This is especially the case in mobile e-commerce to which eBay is devoting much attention to win over smartphone-centric Millennials and other young consumers.
Although eBay may not have the growth track record of an Amazon or Alibaba, it does have some growth opportunities on the horizon. It has a huge customer base from which to build from and expand opportunities across several international markets.
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