Shopify Inc. (Ticker: SHOP), a leader in e-commerce platform services, has been a focal point for investors and market analysts. This report provides a detailed overview of Shopify’s recent stock performance, financial metrics, and market positioning.
Key Financial Highlights
- Market Capitalization: Shopify’s market cap stands at approximately $94.81 billion, reflecting its substantial size and influence in the market.
- Performance Trends: The company has shown impressive growth, with a 58.04% performance increase over the past month and a 112.59% increase year-to-date.
- Stock Price and Volatility: The stock closed at $73.79, having experienced a significant range over the past 52 weeks, from $32.35 to $71.58. The average true range (ATR) of 2.58 indicates moderate volatility.
- Earnings Per Share (EPS): The EPS over the trailing twelve months (ttm) is -0.91, with an expected increase to 1.04 next year.
- Sales and Profit Margins: Shopify reported sales of $6.65 billion with a profit margin of -17.27%. The quarterly sales growth year-over-year is 25.46%.
Ownership and Insider Activity
- Insider Ownership: Insiders own about 9.63% of Shopify’s shares, indicating confidence from those closest to the company. However, there have been no recent insider transactions.
- Institutional Ownership: Institutions hold 62.37% of Shopify’s shares, suggesting strong institutional confidence in the company’s future.
Analyst Ratings and Price Targets
- Analyst Recommendations: The average recommendation for SHOP is 2.15, which falls into the category of moderate buy to hold.
- Target Price: The target price is set at $69.02, slightly below the current price, indicating a cautious outlook from analysts.
Other Key Metrics
- Debt to Equity Ratio: Shopify maintains a relatively low debt-to-equity ratio, at 0.14 for long-term debt and 0.13 overall, suggesting a conservative approach to leveraging.
- Return on Assets and Equity: The return on assets (ROA) is -10.60%, and the return on equity (ROE) is -13.53%, reflecting current challenges in profitability.
- Liquidity Ratios: The company has a quick ratio and current ratio of 7.23, indicating robust liquidity and short-term financial health.
Market Sentiment
- Relative Strength Index (RSI): With an RSI of 76.85, the stock is currently in the overbought territory, which might indicate a potential pullback in the near term.
- Short Interest: The short interest ratio stands at 2.11%, showing a moderate level of investor skepticism or hedging against the stock.
Conclusion
Shopify Inc. presents a mixed picture for investors. While its market cap, sales growth, and liquidity ratios paint a picture of a robust and growing company, its negative profit margins and EPS, along with a cautious analyst outlook, suggest potential challenges. Investors in Shopify should consider these factors along with broader market trends and their investment strategy.