Amazon.com, Inc. (AMZN), The Gap Inc. (GPS) & Online Ho, Fashionistas!

eBay is clearly more of a value stock than Amazon with a 25.71 P/E and a 1.35 PEG. RueLaLa is a very small part of EBay with only an investing stake rather than a wholly owned subsidiary but it shows they do recognize the power of these flash and private sale sites.

The company reported its Q1 results on April 17 with a 14% increase in revenue year over year and GAAP earnings of $0.51 per share. Marketplaces grew revenues by 13% and PayPal grew revenues by 18%. Margins increased and the company bought back $476 million worth of stock.

There’s not much not to like about eBay with PayPal growing its user base of merchants and customers with another 5 million in the quarter to 128 million total.

Buy Gap, get Piperlime for free

On virtually every retail earnings call over the last few quarters, CEOs have mentioned their e-commerce sites and their progress. The Gap Inc. (NYSE:GPS), apparently has it down if these fashionista editors like Piperlime so much.

Gap is a retailer of men’s, women’s, and children’s apparel under the Piperlime, Athleta, Gap, Old Navy, Intermix, and Banana Republic brands. The company has 3,400 stores worldwide. The Gap Inc. (NYSE:GPS) is the best value of these three with a 15.85 P/E and a 1.60% yield at a sustainable 27.00% ratio. The PEG is the same as eBay’s at 1.35. The return on equity is 40.18%

The stock is up 35.23% over the last year and the return on equity is 40.18%. It’s come back from several years where the stock did nothing but in 2012 the stock doubled from $18.00 to $36.00 right where it is now. The median price target is $40.00 for a little less than 10% upside. Barclays initiated coverage on The Gap Inc. (NYSE:GPS) on April 1 with an Overweight.

Although it’s got Piperlime and Athleta to compete with Nike and Lululemon Athletica, I can’t get more excited about The Gap Inc. (NYSE:GPS). It’s basically a solid retail stock. Unless you like shopping there I have to say in general I like Target or Macy’s better.

Shop until you drop

As the best online retailer Amazon is still my favorite play on e-commerce. I agree it is at a tipping point and going forward momentum on profitable initiatives should continue.

PayPal is the main reason to own eBay and it is doing very well and should continue gaining active users. The Gap Inc. (NYSE:GPS) will probably move sideways after the big run it has had since the beginning of 2012.

The article Online Ho, Fashionistas! originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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