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Amazon Rises, eBay Falters After ChannelAdvisor Reports July Comps Sales

Amazon Rises, eBay Falters After ChannelAdvisor Reports July Comps Sales
By: Martin Blanc
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News of Amazon.com, Inc.’s (AMZN) entry into mobile payments was already making headlines today when e-commerce company ChannelAdvisor (ECOM) published its monthly report, outlining the results for July’s same-store sales growth at online retailers. The report measures comparable sales at such retailers on a gross merchandise volumes (GMV) basis.

Amazon was the pick of the lot last month with a 40.4% jump in same-store sales from the same month last year. That was up considerably from the 34.4% year-over-year (YoY) growth it posted in June, and its highest gain in over 12 months. Amazon’s comp sales growth has in fact risen consistently every month over the course of the year. That confirmed what many on Wall Street know already – Amazon’s might in the online retail space has not lost its luster.

Meanwhile, same-store sales at the company’s rival eBay, Inc. (EBAY) rose only 9.7%, down from the 12.3% growth in June, showing a slight weakness of late. Auction sales declined 8.2% at eBay, while comp sales of fixed price items rose 12.8%. Auto sales at eBay rose 8% for the month.

ChannelAdvisor said online same-store sales driven by search ads for the month increased 7% YoY, down from 20.4% in June. Average order values rose 6%, with conversion rates coming in at 8%. The e-commerce solution provider also provided a few metrics on the Google (GOOG) Shopping platform, which saw a 41% YoY rise, declining from 47.8% in June, with conversion rates dropping 9.5% amid monetization challenges due to the shift toward mobile.

Amazon’s share price rise today was also buoyed by news of the company launching its Local Register service that includes a credit card reader for small, local merchant to take payments. Amazon is also touting better pricing for the service, charging customers a flat 2.5% per transaction, lower than startup rival Square Inc., which takes 2.75%.

Several sell-side analysts also reiterated their bullish stance on Amazon today, following the news. Analysts at Robert Baird said they were maintaining their Outperform rating on the stock, with a target price of $400. Similarly, Gene Munster at Piper Jaffray cited the positive report from ChannelAdvisor as a sign of inherent online retail strength at Amazon, reiterating his Overweight rating on the stock and $420 target price.

Analysts at Credit Suisse are some of the more bullish ones, and also reiterated their Outperform view and target price of $431 on Amazon. Meanwhile, ISI Group has a Strong Buy rating on Amazon and a $410 price target.

Amazon shares rose 2.18% today on the Nasdaq; eBay’s stock price fell 0.9%. Google shares were up 2.1% in the same period.

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