The e-commerce sector has been through wild swings in the last few years. The pandemic served as a big catalyst for online shopping, and e-commerce stocks surged. However, as the market discounted the post-pandemic reality, even the best e-commerce stocks plunged.

I believe that most e-commerce stocks have seen the worst in terms of correction. As a matter of fact, some of the best e-commerce stocks to buy have been gradually trending higher. It’s a good time to accumulate these stocks for near- and long-term value creation.

It’s worth noting that “global e-commerce rose from 15% of total retail sales in 2019 to 21% in 2021.” Last year, e-commerce contribution further increased to 22% of retail sales. Estimates indicate that e-commerce sales will account for 27% of retail sales by 2026.

Therefore, the trend is likely to remain positive and benefit major e-commerce players. I must add that sales growth will remain healthy in emerging markets as compared to the developed world.

Let’s focus on three of the best e-commerce stocks to buy for value creation.

Coupang (CPNG)

Without a doubt, the worst of the correction for Coupang (NYSE:CPNG) stock is over. CPNG stock has trended higher by 45% in the last 12 months, and I expect the uptrend to sustain. It’s worth noting that even after revenue missing estimates for Q4 2022, CPNG stock has remained resilient. This is an indication of being undervalued as the company focuses on improving its EBITDA margin.

It’s worth noting that Coupang has improved its EBITDA margin from 0.1% in Q1 2022 to 5.1% in Q4 2022. For the long term, Coupang is targeting an adjusted EBITDA margin of 10%. With revenue growth and operating leverage, I expect margin expansion to continue in 2023. This is a key catalyst for stock upside.

Further, Coupang reported an operating cash flow of $565 million for 2022. With revenue growth and margin expansion, I expect the company to be free cash flow positive in the next 12 to 18 months. This is another catalyst for stock upside.

Another positive is that Coupang ended 2022 with cash and equivalents of $3.5 billion. Besides investment in the core business, the company has ample flexibility to invest in Coupang Eats and Coupang Play.

Sea Limited (SE)

After trading within striking distance of $400, Sea Limited (NYSE:SE) stock suffered a big crash. In November 2022, SE stock traded at lows of $40. However, the rally from oversold levels has been meaningful, with the stock trading almost 100% higher at $79. The rally has been backed by strong numbers in the e-commerce segment in Q4 2022.

The biggest positive from the company’s Q4 2022 results are as follows – Sea Limited reported GAAP marketplace revenue of $1.8 billion, which was higher by 44% on a year-on-year basis. For the same period, the segment-adjusted EBITDA turned positive to $196.1 million. Cash burn in the e-commerce segment was a major reason for SE stock correction. With a focus on efficiency and profitability, it’s likely that the stock uptrend will sustain from deeply oversold levels.

It’s worth noting that Sea Limited ended Q4 2022 with cash and short-term investments of $6.9 billion. This provides ample flexibility to invest in platform development and emerging segments like digital financial services.

PDD Holdings (PDD)

Among Chinese e-commerce stocks, PDD Holdings (NASDAQ:PDD) looks undervalued at a forward price-earnings ratio of 15.4. Amidst the volatility, PDD stock has been sideways in the last six months. I believe that a sharp reversal rally is impending, considering the valuations.

A key reason to be bullish on PDD Holdings is the growth trajectory. For Q4 2022, the company reported revenue growth of 46% on a year-on-year basis to $5.8 billion. Operating profit for the same period increased by 32% to $1.3 billion.

Another point to note about PDD is a significant investment in technology and innovation. Last year, the company invested $1.5 billion in research and development. Continued investment in technology is likely to ensure healthy growth.

PDD Holdings is a cash flow machine with an operating cash flow of $7 billion for 2022. The company also has a robust cash buffer of $21 billion. Given these metrics, PDD stock is attractively valued and poised for a strong reversal rally.

On the date of publication, Faisal Humayun did not hold (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.