E-commerce stocks like Shopify (TSX: SHOP) and Amazon (NASDAQ: AMZN, AMZN: US) flourished
during the worst spell of COVID-19 as people worldwide switched to a digital lifestyle.
But as the pandemic restrictions relax, consumers are slowly returning to stepping out for shopping
as more physical stores and malls open back up. Please subscribe to the channel I’m
sage for kalkine media.
As a result, both Shopify and Amazon seem to be having a very similar experience: a
slowdown in e-commerce activities and significant stock price declines amid a prolonged tech
stock selloff.
Is one of them still a better option to explore than the other amid the ongoing selloff? Let's
find out.
Shopify and Amazon's financial performance in Q1 FY2022
As Shopify and Amazon vary in market size (market capitalization), their financial numbers
also reflect notable differences. However, one can consider year-over-year (YoY)
change to analyze which one did well in Q1 FY2022.
Shopify posted US$ 1.2 billion in total revenues in the first three months of FY2022, up by
22 per cent from Q1 2021. The Canadian company reported a net loss of US$ 1.47 billion in
the latest quarter, significantly lower than a profit of US$ 1.3 billion in the previous
year's quarter.
Meanwhile, Amazon recorded a seven per cent increase in its net sales to US$ 116.4 billion
in Q1 FY2022 compared to the same quarter a year ago. This US-headquartered e-commerce
giant also posted a net loss of US$ 3.84 billion
in the latest quarter, down from a profit of US$ 8.1 billion
in Q1 2021.
Stock performances of Shopify and Amazon
Shopify stock fell by nearly 77 per cent in 12 months, while Amazon stock plummeted by
over 39 per cent in a year. SHOP stock was up by almost eight per cent from a 52-week
low of C$ 386.29 (June 14). On the other hand, AMZN stock rose by approximately five per
cent from its 52-week low of US$ 101.26 (May 24).
According to Refinitiv data, the Relative Strength Index (RSI) for SHOP was about 43.03
on June 20, while for AMZN, it was 40.48 this day (above the oversold level of 30).
Bottomline
Some market experts believe that though Shopify appears to be more volatile than Amazon at
the moment when comparing their stock performance, Shopify's lesser market size could hold significant
return potential with evolution in consumers' shopping habits supported by its growing e-commerce infrastructure.
It is also worth noting that these tech giants are still expanding their e-commerce footprints.
Also, despite the ongoing market scenario, online stores are gaining popularity and e-commerce
players are likely to see massive growth over
the years.