Top Internet Stocks Have Huge Upside as E-commerce Soars

Amazon.com Inc. (NASDAQ: AMZN) continues to be the market leader and continues to add to its market share. Third-party sellers were up 26% year-over-year in March and 23% in February. These numbers support the Jefferies contention that Amazon is growing about two times faster than other e-commerce companies. The Jefferies price target for the stock is $450. The Thomson/First Call estimate for Wall Street is at $433.87. Amazon closed trading Wednesday at $331.85, so a move to the Jefferies target would be a huge 42% gain.

eBay Inc. (NASDAQ: EBAY) is continuing improvements in the user experience. eBay’s marketplaces keep attracting new users, evidenced by double-digit growth in active users and items sold. Sales growth in eBay’s fixed-price format has accelerated nicely to 22% year-over-year in March from a 16% number posted in February. The Jefferies price target is set at $66, and the consensus target is $62.71. The stock closed Wednesday at $55.89. A move to the target would be a 20% gain.

Facebook Inc. (NASDAQ: FB) is a top provider for people looking to target and advertise on the Internet. The stock has been knocked down 21% from peak levels and 9.2% in the recent sell-off. It now trades at the same forward price to earnings multiple that is did last year, adjusted for extra shares and dilution. The social media giant has ramped up mobile advertising earnings and has crushed earnings the past three quarters. Wall Street analysts think that Facebook is becoming more central to the overall Internet marketing funnel, gaining share of marketing spending with interest from branding, public relations, direct response and CRM functions, as well as online search and display budgets. The Jefferies price target is $80. Facebook closed Wednesday at $62.41. A move to the target would be a 30% gain.

Google Inc. (NASDAQ: GOOG) has transitioned its Google Shopping program to a paid service based on product listing ads. The ads generate higher revenue than text ads for Google due to much higher click-thru and conversion rates, which more than offset lower cost-per-clicks. Conversion rates are jumping for the Internet giant, and revenue should follow along. Jefferies thinks its overall first-quarter results may be outstanding. Their price target for the stock is $650, while the consensus is at $662 on a split-adjusted basis. Google closed at $564.14 on Wednesday. A move to the Jefferies target would be a 16% gain.

LinkedIn Corp. (NYSE: LNKD) is not an e-commerce powerhouse by any means, but it dominates the interconnecting of professionals. LinkedIn has more than 277 million members worldwide, with millions more being added every year, making it the most valuable social networking site for business-to-business marketing today. The stock was eviscerated in the recent sell-off and may offer one of the most compelling values now. The Jefferies price target is a gigantic $280, and the consensus is at $252.71. The stock closed trading Wednesday at $176.18. Hitting the Jefferies target would be a monster 60% gain

RetailMeNot Inc. (NASDAQ: SALE) was down almost 30% and many were blaming the big hit on the recent IPO of Coupons.com. Wall Street analysts point out that the businesses of the two companies do not overlap significantly — 75% of the revenue generated by Coupons.com comes from consumer packaged goods companies, while the majority of RetailMeNot’s revenue comes from national retailers. The Jefferies price target is $46, and the consensus is lower at $43.07. The stock closed Wednesday at $35.08. A move up to the Jefferies target is close to a 35% gain.

The recent sell-off has spooked some of the aggressive momentum traders out of their positions. That has allowed investors to have a fresh look at some of the top Internet names to buy. While the volatility is nerve-racking for everybody, the unabated growth of the Internet and the e-commerce power it delivers should continue for years, with enhancement just making the productivity aspect better.