The internet retail industry flourished amid the COVID-19 pandemic on strong product demand and the sheer convenience of online shopping. And with extended remote life and work arrangements, demand for internet retail shopping is expected to grow over the long term.
Despite increasing global inflation rates, this industry is expected to maintain its accelerated growth trajectory due to stable demand. According to Technavio, the online apparel retailing market value is expected to grow at a 10.6% CAGR from 2020 to 2025.
Given this backdrop, Wall Street analysts expect fundamentally strong small-cap internet retail stocks a.k.a. Brands Holding Corp. (AKA), 1847 Goedeker Inc. (GOED), and iMedia Brands, Inc. (IMBI), to rally more than 190% in price in the coming months. So, it could be worth adding these stocks to your watchlist.
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a.k.a. Brands Holding Corp. (AKA)
AKA in San Francisco operates a portfolio of online fashion brands in the United States, Australia, and internationally. It offers apparel, footwear, and accessories. Its market capitalization is $555.76 million.
On March 1, 2022, Jill Ramsey, CEO, AKA, said, “We grew active customers by 61% to more than 3.7 million and our social media following to over 8.7 million followers. We added two world class brands to our portfolio, diversifying us into men’s and streetwear. Our strong performance demonstrates the power of our platform as we continue to grow our brands through next generation merchandising and marketing.”
AKA’s net sales increased 157.7% year-over-year to $182.42 million for the fourth quarter, ended Dec. 31, 2021. Its gross profit came in at $99.53 million, up 133.1% year-over-year. Furthermore, its cash and cash and cash equivalents came in at $38.83 million for the period ended Dec. 31, 2021, compared to $26.26 million for the period ended Dec. 31, 2020.
Analysts expect AKA’s revenue to grow 42.1% year-over-year to $799.02 million in 2022. Its EPS is estimated to increase 146.7% to $0.37 in 2022. The stock closed yesterday’s trading session at $4.32. Wall Street analysts expect the stock to hit $14.17 in the near term, which indicates a potential 228% upside.
1847 Goedeker Inc. (GOED)
GOED operates an e-commerce platform for appliances and furniture in the United States. The Ballwin, Missouri, enterprise also sells fitness equipment, plumbing fixtures, televisions, outdoor appliances, patio furniture, and commercial appliances. Its market capitalization is $180.86 million.
On Nov. 15, 2021, Albert Fouerti, CEO and Director, said, “Our increased scale positioned us to obtain inventory, meet increased customer demand and mitigate the full impact of global supply chain constraints. We feel well-positioned from an inventory perspective heading into next quarter, and we will continue to execute against our outlined priorities and aggressively pursue greater market share.”
For the third quarter, ended Sept. 30, 2021, GOED’s net sales increased 38.8% year-over-year to $141.9 million. Its net income came in at $3.9 million, compared to a $700,000 loss in the prior period, while its EPS was $0.03, compared to a $0.01 loss per share.
GOED’s revenue is expected to be $603.57 million in its fiscal year 2022, representing a 9.7% year-over-year rise. The company’s EPS is expected to increase 4.2% to $0.25 in 2022. The stock closed yesterday’s trading session at $1.70. Wall Street analysts expect the stock to hit $5.00 in the near term, which indicates a potential 194.1% upside.
iMedia Brands, Inc. (IMBI)
IMBI in Eden Prairie, Minn., operates as a multiplatform interactive video and digital commerce company in the United States. It has two segments: ShopHQ and Emerging. The company markets, sells, and distributes products to consumers. Its market capitalization is $129.36 million.
On Nov. 17, 2021, Tim Peterman, CEO of IMBI, said, “Our mission is to capitalize on the accelerating marketplace convergence of entertainment, ecommerce, and advertising. Our strong third-quarter performance and the successful closing of our 123tv acquisition are tangible examples that our progress continues.”
IMBI’s net sales came in at $130.68 million for the third quarter, ended Oct. 30, 2021, up 19.9% year-over-year. Its gross profit was $54.42 million, up 33.3% year-over-year. Also, its cash came in at $51.35 million for the period ended Oct. 30, 2021, compared to $15.48 million for the period ended Jan. 30, 2021.
For its fiscal year 2023, analysts expect IMBI’s revenue to be $690.40 million, representing a 26.9% year-over-year rise. Its EPS is estimated to increase 51.6% in 2023. The company surpassed the Street’s EPS estimates in three of the trailing four quarters. The stock closed yesterday’s trading session at $6.00. Wall Street analysts expect the stock to hit $29.50 in the near term, which indicates a potential 391.7% upside.
AKA shares were trading at $4.62 per share on Wednesday morning, up $0.30 (+6.94%). Year-to-date, AKA has declined -50.05%, versus a -10.33% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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