In today’s fluctuating market, discerning investors are looking for opportunities. Enter the world of retail stocks, a domain bustling with potential. While some sectors have experienced turbulence, the retail industry has pockets of resilience and growth. What’s particularly appealing for savvy market players are undervalued retail stocks that offer significant upside. The big question on every investor’s mind: which are the prime “Retail Stocks to Buy Now”?
In this analysis, we will delve deep. We will not just highlight retail stocks with potential. Instead, we are specifically zeroing in on those undervalued gems that represent a compelling buy in the present scenario. It’s more than just numbers; it’s about discerning the potential beneath the surface. So, gear up as we explore undervalued retail stocks to buy now and why they might be the game-changers you’ve been seeking.
eBay (EBAY)
In the swirling whirlwind of retail stocks, it’s easy for investors to overlook the quieter yet promising players. Take eBay (NASDAQ:EBAY), for example. Despite a negative 10% return this year, the e-commerce behemoth is navigating a captivating path in the expansive retail landscape.
Its recent second quarter 2023 results surpassed expectations, boasting a revenue of $2.54 billion and a notable surge in net income to $171.1 million. Clearly, there’s a deeper narrative behind these numbers than what’s immediately visible.
Diving deeper, eBay’s revenue grew nearly 5%. The staggering 132% rise in net income, combined with an EPS that beat forecasts by 3.58%, might earmark it as one of the undervalued retail stocks to buy now. In a market often bedazzled by louder names, eBay’s strategic moves — like acquiring Certilogo to bolster its apparel resale business and introducing a trading card submission service for its vault — underline its commitment to evolving with consumer needs. Moreover, with the rise of generative AI, companies like eBay stand on the threshold of amplifying their profitability further. Such foresight is a testament to eBay’s adaptability and vision for the future.
Overall, investors need to keep an eye on giants like eBay. These companies are reshaping the retail narrative as the retail landscape evolves. Offering a blend of stability and innovation, eBay might be a sleeper stock pick for those keen to dive beneath the surface.
PayPal (PYPL)
In a year that’s seen an underwhelming performance from many retail stocks, PayPal Holdings (NASDAQ:PYPL) stands out with a notably sharp decline, its year-to-date return plunging by around 20%. Yet, diving deeper into their latest earnings report might hint at a contrasting story. The company’s Q2 results for June 2023 showcased a revenue jump to $7.29 billion, up 7% year-on-year. More impressively, net income skyrocketed, boasting an astounding 402% increase, settling at $1.03 billion. Likewise, the diluted EPS surged by 417% to $0.92, even though it narrowly missed estimates by 0.29%.
However, two recent moves by the fintech juggernaut are drawing attention and could be pivotal for its future prospects. Firstly, the announcement of Intuit’s Alex Chriss as the incoming CEO suggests a fresh strategic direction, potentially unlocking further value. On the flip side, PayPal’s recent foray into launching a dollar-pegged stablecoin has raised eyebrows. Rep. Maxine Waters (D-Calif.), in particular, has expressed deep concerns surrounding the move.
Yet, this very audacity to innovate often differentiates market leaders from the pack. Investors seeking undervalued retail stocks to purchase should consider PayPal’s recent dip as a potential golden opportunity. Although past performance doesn’t ensure future returns, the company’s strong fundamentals position it as an attractive option. Its bold strategic maneuvers further position it strongly in the retail space.
Best Buy (BBY)
The tumultuous world of retail stocks has recently been a rollercoaster for investors, with some names emerging as standout opportunities. Best Buy (NYSE:BBY), a stalwart in the electronics retail arena, has witnessed an 11% decline over the past six months.
The situation leaves many to wonder if it now falls into the category of undervalued retail stocks to buy now. Diving into the Q1 2024 earnings, the Richfield, Minnesota-based company posted revenue of $9.47 billion, marking an 11% year-on-year drop, while net income sat at $244 million, a substantial dip of around 28%. Additionally, diluted EPS came in at $1.11, which, despite being down 26% year on year, managed to beat the forecast by 5%. A silver lining in a slightly cloudy horizon.
However, like all tales in the stock market, context is essential. Best Buy’s observations about wary consumers highlight a shift in consumer behavior. Its guidance towards negative comparable sales growth further emphasizes this shift. However, the company’s announcement on staff reductions showcases its proactive approach.
With its present undervaluation, there’s an argument to be made that Best Buy could be among the retail stocks to buy now for those with a keen eye for potential rebounds. As always, the retail sector is about adaptation, and Best Buy’s long-standing reputation could serve it well in navigating this ever-evolving landscape.
On the publication date, Faizan Farooque did not hold (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.