SHOP Report – Should you buy or sell SHOP right now?

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.

The information provided in this stock report is for informational purposes only and is not intended for trading purposes. The report does not constitute investment advice, nor is it an offer or solicitation of an offer to buy or sell any securities or other financial instruments. All information, including stock prices, market data, company fundamentals, and analyst ratings, is provided on an “as is” basis for informational purposes only, and is not intended for trading purposes or advice.

Past performance of the stocks mentioned in this report is not indicative of future results. Investing in stocks involves risks, including the loss of principal. Investors should consider their investment objectives and risks carefully before investing. The content of this report is not intended to provide legal, tax, or financial planning advice, and investors are advised to consult with a qualified professional for this type of advice.

All investments involve risks, including the possible loss of capital. The author and publisher of this report are not liable for any actions taken as a result of this report. It is recommended that readers conduct their own independent analysis or consult a qualified financial advisor before making any investment decisions.

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