Shares of Newegg Commerce (NEGG -2.40%) rose 13.3% in a rough-and-tumble August, according to data provided by S&P Global Market Intelligence. The electronics e-commerce retailer did report first-half 2021 results at the very end of the month, but share prices fell 4.7% the next day. For the most part, the stock was swept up in the unpredictable shenanigans of so-called meme stocks.
Newegg appeals to the meme stock crowd due to its relatively recent entry into the public market. The stock is not heavily shorted, with only 0.3% of the share base being borrowed by investors with a negative view. But the massive jump Newegg posted in June essentially painted a meme-stock target on the company's back. Newegg has been a volatile ticker all summer long, swinging from $16 per share at the low end to $79 per share at the top. Today, Newegg's shares are back down to $19 per stub.
The glossed-over earnings report was quite impressive, by the way. Newegg's sales rose 40% year over year to $1.2 billion. Bottom-line earnings increased by 14%, stopping at $21.6 million or $0.05 per diluted share. Analysts didn't prepare any estimates for this period and Newegg's management never issued guidance for its first report as a public company, and I sure don't expect the company's future financial reports to cover six months rather than a single quarter each. Still, the raw results hold up well to the sales trends posted by sector peers Best Buy (20% year-over-year sales growth) and Conn's (Q2 revenue down 5%).
Both Best Buy and Conn's are trading far closer to their annual highs than to their 52-week lows, as the home electronics market continues to be fertile ground for sustained business growth. I don't expect Newegg to get back to the levels of June's temporary spike anytime soon, but the young stock (tied to a decades-old business operation) deserves to stabilize and start reflecting the company's solid business prospects.