Investing.com -- Needham & Company initiated coverage of several internet stocks in notes on Wednesday, giving Buy ratings to eBay (NASDAQ:EBAY), Etsy (NASDAQ:ETSY), and Wayfair (NYSE:W).
Analysts at the firm are optimistic about these companies' ability to navigate current macroeconomic challenges and leverage new initiatives for growth.
eBay received a Buy rating with a price target of $72 a share. Needham noted that eBay remains a leader in driving frequency among its loyal buyers.
"We see the potential for eBay (and other large marketplaces) to maintain leadership positions through leveraging machine learning to improve search and discovery," the report said.
The focus on non-new, in-season items are said to help differentiate eBay from Amazon (NASDAQ:AMZN), creating cross-selling opportunities and enhancing user engagement. Additionally, Needham highlighted eBay’s quality assurance efforts, which address a key concern among survey respondents.
Etsy also earned a Buy rating with a $60 price target. While the company has not escaped the broader slowdown in consumer spending, Needham is optimistic about Etsy’s future.
"We think the investments in search and discovery and other initiatives sets the company up well to grow off their consumer wallet share gains since the pandemic.," the analysts wrote.
Similar to eBay, Etsy’s ability to apply machine learning to improve its marketplace experience is seen as being crucial for long-term growth.
Wayfair, which has faced challenges from weak consumer spending and housing market softness, was assigned a Buy rating with a $60 target. Analysts believe Wayfair could see a turnaround in 2025 as the housing market stabilizes.
Meanwhile, Needham re-initiated coverage of Chewy (NYSE:CHWY) with a Hold rating, citing concerns about the company’s premium valuation.
The firm also reinstated coverage of Beyond Inc. at Buy, emphasizing the potential but noting execution risks.