It’s definitely a buyer’s market for long-term technology investors. As a whole, the stock market has been spooked in the past several months. Between 40-year-high inflation, the Federal Reserve’s interest rate hikes, and added trouble from Russia’s War against Ukraine, investors have fallen out of love with equities, especially high-priced technology companies. Since the start of the year, the Nasdaq Composite has slumped 26%, and the sell-off will likely continue until investors are presented with a clearer picture of the current economy.

No one hopes to experience corrections, but as patient investors, we can take advantage of pullbacks by accumulating shares of companies we believe will bounce back strongly in the long run. In fact, buying high-quality stocks at low prices right now could generate fortunes for investors down the line. It’s not always easy to pull the trigger on stocks in the midst of an uncertain economic environment, but that is when we often make our best investments. 

Here are two high-growth e-commerce stocks that could deliver massive gains for prudent investors.

Image source: Getty Images.

1. Jumia Technologies 

Jumia Technologies (JMIA -6.06%), which has often been referred to as the “Amazon of Africa,” has made considerable progress in recent periods. In its opening quarter of 2022, the company’s gross merchandise volume (GMV) sprung 27% year over year to $252.7 million, and its revenue increased 44.3% to $47.6 million. Marketplace revenue climbed 8% to $26.4 million, but the real growth came through revenue from direct sales, which ascended 153% to $19.7 million.

The key to Jumia’s growth moving forward will be adding buyers to its platform. In the first quarter, the company’s active customers climbed 29.2% to 3.1 million, and total orders jumped 40.5% to 9.3 million. The company is successfully expanding its reach, but it continues to pay a hefty price to do so. Due to ramping up its marketing and technology investments, the African tech company endured an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $55.3 million in the first quarter, much worse than a year ago. 

For all of fiscal 2022, management expects an adjusted EBITDA loss between $200 and $220 million. Jumia’s biggest risk boils down to its ability to eventually achieve net profits. While the company is sacrificing profitability for growth right now, management is confident that it has moved past its peak quarterly adjusted EBITDA losses. And with other business segments like JumiaPay, which is a mobile payment platform similar to PayPal, and its logistics service offering, the company’s total addressable market is off the scale.

With the shares trading at just three times forward sales and down 75% over a one-year period, daring investors should definitely consider starting a position in this stock today.

2. Etsy

Etsy (ETSY -8.70%), which is known for offering one-of-a-kind handmade and vintage products, has watched its share price collapse 60% year to date. In its first quarter, the company grew revenue by 5.2% to $579.3 million, and its diluted earnings retreated 40% to $0.60 per share. The weak growth rates can be attributed to difficult comparable metrics from a year ago when the company was performing exceptionally well due to the COVID-19 pull-forward. Now that the economy is largely reopened, the e-commerce platform faces much more competition from brick-and-mortar stores.

Still, the company made notable headway in the first quarter. It now has 89.1 million active buyers, which translates to 89% growth over a two-year span, and it continues to monetize those customers more efficiently. As of Q1, the average GMS (gross merchandise sales) per buyer expanded 10.5% year over year, up to $137. Etsy’s habitual buyers, which it defines as customers with six or more purchase days and over $200 in spending in the trailing 12 months, have rocketed 275% over a three-year period, up to 8 million today.

This year, Wall Street analysts project Etsy’s total sales will increase 9.3% year over year to $2.6 billion and its earnings will contract 26.5% to $2.50 per share. Next year, which is when comparable metrics normalize, analysts forecast total revenue to grow 19% to $3 billion and earnings to surge 47.2% to $3.68 per share. Today, the company is trading at 4.1 times forward sales, well below its five-year mean of 10.5, and the e-commerce platform has only captured a fraction of its addressable market. For long-term investors, Etsy seems like a perfect play right now.