As a group, e-commerce stocks have been thumped coming out of the Covid-19 pandemic. In-person work and a resurgence of bricks-and-mortar shopping activity have led to a significant selloff in e-commerce stocks over the past 18 months. Few, if any, names in the sector have been spared. Thus, despite the overall market rally being led by technology stocks, e-commerce companies have not experienced similar gains.
While Amazon (NASDAQ:AMZN) is expected to thrive in the long term, the future of other e-commerce companies remains uncertain. Many e-commerce companies look as though they are being left behind by both the marketplace and investors. Here are three e-commerce stocks that just have no more hope left.
Shopify (SHOP)
At one point during the pandemic, e-commerce company Shopify (NYSE:SHOP) became the largest publicly traded company in its native Canada. The market capitalization of Shopify surpassed that of the Royal Bank of Canada (NYSE:RY), the country’s largest lender. My how things have changed.
Today, SHOP stock is down 63% from the all-time high it reached in November 2021. The company’s share price has partially recovered, but its prospects appear limited.
Shopify has been adapting its business strategy over the past 18 months. Last Fall, Shopify announced its pivot to brick-and-mortar retailers with “POS Go,” a physical point-of-sale device. Shopify has also appointed a new CFO and laid off 20% of its staff.
Etsy (ETSY)
Speaking of pandemic darlings that have fallen on hard times, how about Etsy (NASDAQ:ETSY). The online marketplace for handmade and vintage items thrived during the Covid-19 crisis, benefiting from increased crafting and home decoration activities. However, the end of the pandemic seems to have taken the wind out of the sails of Etsy and its stock.
This year, ETSY stock is down 22%. The shares also peaked in November 2021, and since then have fallen 70%.
Part of the problem was macro-related, with many companies seeing overvaluation during the pandemic-driven stock market frenzy. Etsy’s debt increased due to its acquisitions of Depop and Elo7, impacting its financial situation. Additionally, analysts have criticized management for overpaying on these deals, which led to a loss for all last year.
Etsy’s growth is declining, with a 5% decrease in gross merchandise sales reported in Q1 of this year. During the pandemic in 2020, those same sales grew 107%.
Fiverr International (FVRR)
The gig economy is still alive and well, but Fiverr International (NYSE:FVRR) has not been able to capitalize on this trend, as many had hoped. The freelancing platform’s share price has plummeted 92% from its peak in February 2021. Over the past 12 months, the stock has declined 34%. FVRR stock is impacted by concerns that AI could replace freelance jobs, such as writers, designers, and bookkeepers.
Growth at Fiverr has slowed to a snail’s pace coming out of the pandemic. The company reported that its Q1 revenue increased by just 1.5% from a year earlier to $88 million. By comparison, Fiverr’s revenue rose by 27% year-over-year in the first quarter of 2022. Analysts now question Fiverr’s future growth prospects in an era of chatbots and increasing reliance on AI for tasks.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
