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DIY Trend in Home Improvement & Automation to Soar: 5 Picks

By Zacks Investment ResearchStock MarketsJul 23, 2020 08:40AM ET
www.investing.com/analysis/diy-trend-in-home-improvement--automation-to-soar-5-picks-200531679
DIY Trend in Home Improvement & Automation to Soar: 5 Picks
By Zacks Investment Research   |  Jul 23, 2020 08:40AM ET
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The global urban population is expected to swell by around 2.5 billion by 2050. Urban dwellers have shown a significant inclination to Do-It-Yourself (DIY) projects, in both home improvement and home automation. As the coronavirus pandemic have restricted people mostly indoors, they can now invest more time in DIY projects that drives the market.

Stay-at-Home Propels Home Restructuring

The pandemic has forced people to work from home and many companies have suggested employees to continue working remotely even after the coronavirus outbreak. Hence, many are now converting their unfinished basements into a workspace or working on DIY home-office projects. This includes expanding space to fit in another computer monitor and making a bookshelf that can fit perfectly into the space available.

Additionally, in the past years, the United States has been witnessed rising adoption of luxury real estate and with the rise in population of working women, families now have higher disposable income. In fact, women’s involvement in home decoration plays a massive role and will drive growth of the home décor and indoor garden market. Per a Research Dive report, the segment will register revenues of $23.3 million by the end of 2026, at a CAGR of 4.4%.

What drives the current home restructuring and improvement spree is DIY projects’ cost-effectiveness, convenience and the way it gets the entire family involved. Along with that, people are investing in automation technology to convert their homes into smart homes. The adaptation of IoT and the change in taste and preferences of consumers have been driving the home automation market so far. With people stuck indoors, there is a growing demand for safety, convenience, connectivity and security that boosts the DIY smart home market.

Per a marketsandmarkets.com report, the global smart home market size is expected to reach $135.3 billion by 2025 from 2018, at a CAGR of 11.6%. And DIY segment boosts growth as those tools and systems are far more affordable than the professionally-fixed automation systems. Additionally, surge in technological innovations in sensors, analytics and communication systems have buoyed the DIY smart home industry over the years.

Our Picks

According to a study of Research Dive, the DIY Home Improvement Retailing Market will surpass $189.1 million by 2026, at a healthy CAGR of 4.1%. And given the encouraging trends, we have shortlisted five stocks that are poised to grow.

RH (NYSE:RH) RH operates as a retailer offering furniture, lighting, textiles, bathware, décor, outdoor and garden, and child and teen furnishings. The company belonging to the Zacks Retail - Home Furnishings industry has an expected earnings growth rate of nearly 14% for the next quarter.

The Zacks Consensus Estimate for its current-year earnings has climbed 50.7% over the past 60 days. RH sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

eBay Inc (NASDAQ:EBAY). EBAY operates the marketplace and classifieds platforms that connect buyers and sellers. The company sells home-improvement supplies such as DIY flooring, washable paint and other items for home interior designing. Ebay’s expected earnings growth rate for the current quarter is 54.4% against the Zacks Internet - Commerce industry’s projected earnings decline of 40.9%. The Zacks Consensus Estimate for its current-year earnings has moved up 12.6% over the past 60 days. eBay flaunts a Zacks Rank #1.

Wayfair (NYSE:W) Inc. W engages in the e-commerce business, offering furniture, décor, decorative accents, housewares, seasonal décor, and other home goods. The company’s expected earnings growth rate for the current quarter is more than 100% against the Zacks Internet - Commerce industry’s projected earnings decline of 40.9%. The Zacks Consensus Estimate for its current-year earnings has moved 8.2% up over the past 60 days. Wayfair carries a Zacks Rank #2 (Buy).

Etsy (NASDAQ:ETSY), Inc. ETSY operates online marketplaces for buyers and sellers. The company offers a range of DIY kits for both indoor and outdoor decorations, gardening kits and more. Etsy’s expected earnings growth rate for the current year is 48.7% against the Zacks Internet - Services industry’s projected earnings decline of 2.4%. The Zacks Consensus Estimate for its current-year earnings has climbed 7.6% over the past 60 days. Etsy holds a Zacks Rank #2.

Shopify (NYSE:SHOP) Inc. SHOP provides a cloud-based multi-channel commerce platform. The company offers DIY home improvement and tools, paints, varnish and more. Shopify’s expected earnings growth rate for the current year is 76.7% against the Zacks Internet - Services industry’s projected earnings decline of 2.4%. The Zacks Consensus Estimate for its current-year earnings has climbed 3.9% over the past 60 days. Shopify holds a Zacks Rank #2.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

eBay Inc. (EBAY): Free Stock Analysis Report

RH (RH): Free Stock Analysis Report

Wayfair Inc. (W): Free Stock Analysis Report

Etsy, Inc. (ETSY): Free Stock Analysis Report

Shopify Inc. (SHOP): Free Stock Analysis Report

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DIY Trend in Home Improvement & Automation to Soar: 5 Picks
 

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DIY Trend in Home Improvement & Automation to Soar: 5 Picks

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