Amazon.com, Inc. (AMZN), eBay Inc (EBAY), Overstock.com, Inc. (OSTK): Which E-Commerce Stock Is the Best Buy After Earnings?

#1 A newly-emerged leader

I became bullish on Overstock.com, Inc. (NASDAQ:OSTK) at $15, and remain bullish at $35 as the company continues to perform with fundamental perfection. For the second quarter, Overstock easily exceeded expectations with revenue growth of 22% and a 34% rise in gross profit.

Overstock.com, Inc. (NASDAQ:OSTK) produced a 170 basis point rise in gross margin. Therefore, Overstock is not only producing Amazon-like revenue growth, but is also becoming very profitable. Currently, Overstock has operating margins of just 1.72%.

Moreover, at 0.66 times sales, Overstock.com, Inc. (NASDAQ:OSTK) is the cheapest of the three e-commerce stocks. The company’s growth is expected to stay in the range of 15%-20%, as is its bottom line improvements. Back in 2011, many feared that the company’s investments into growth would not pay off, and that its margin weakness was permanent. However, Overstock has taken the market by storm, and is definitely a small but growing force to be reckoned with.

Hence, with industry-leading growth, a cheap stock, and improvements in efficiency, Overstock.com, Inc. (NASDAQ:OSTK) is presenting the greatest upside and value of any e-commerce stock.

Final thoughts

I, for one, think that the e-commerce space is an area of great opportunity. eBay Inc (NASDAQ:EBAY) is disappointing. However, Amazon.com, Inc. (NASDAQ:AMZN) and Overstock.com, Inc. (NASDAQ:OSTK) remain growth companies in a market that rewards strong fundamental performance. Therefore, I don’t think you can go wrong with either, although Overstock’s value and its margin expansion sets it apart.

The article Which E-Commerce Stock Is the Best Buy After Earnings? originally appeared on Fool.com and is written by Brian Nichols.

Brian Nichols has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and eBay. The Motley Fool owns shares of Amazon.com and eBay. Brian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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