Shopify Inc. (SHOP) Is A Stock You Should Watch

As of Friday close, Shopify Inc.’s (NYSE:SHOP) stock was up $48.97, moving up 13.85 percent to $402.48. The average number of shares traded per day over the past five days has been 6,881,240 shares. 3 times new highs have been achieved over the past 5 days, with a $24.99 gain in that time frame. In the last twenty days, the average volume was 5,335,965, while in the previous 50 days, it was 4,073,216.

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Since last month, SHOP stock retreated -33.45%. Shares of the company fell to $308.06 on 05/12/22, the lowest level in the past month. A 52-week high of $1762.92 was reached on 01/03/22 after having rallying from a 52-week low of $308.06. Since the beginning of this year, SHOP’s stock price has dropped by -70.78% or -$974.91, and marked a new high 1 time. However, the stock has declined by -77.17% since its 52-week high.

Valuation Metrics

Right now, Shopify Inc. (SHOP) has a P/E ratio of about 324.06. The stock’s beta is 1.81. Besides these, the trailing price-to-sales (P/S) ratio of 11.49, the price-to-book (PB) ratio of 5.18, and the price-to-cash flow ratio of 218.56 may also be considered.

Financial Health

In the three months ended September 29, Shopify Inc.’s quick ratio stood at 11.80, while its current ratio was 11.80, showing that the company is able to pay off its debt. According to company report, the long-term debt-to-equity ratio for the quarter ending September 29 was 0.09, and the total debt-to-equity ratio was 0.09. On the profitability front, the trailing twelve-month gross margin is 53.00% percent. In the year ended September 29, operating margins totaled 1.10%. Based on annual data, SHOP earned $2.48 billion in gross profit and brought in $4.61 billion in revenue.

A company’s management is another factor that investors consider when determining the profitability of an investment. In the past year, return on investment (ROI) was 0.40%. Return on equity (ROE) for the past 12 months was 1.70%.

According to the earnings report, the company had a lower net income in the recent quarter than it did in the previous quarter. SHOP’s revenue rose 36.48% during the quarter, while net income inched up to $4.61 billion. While analysts expected Shopify Inc. to report $1.39 quarterly earnings, the actual figure was $1.04 per share, beating the consensus estimate by -25.20%. During the quarter, the company generated -$81.31 million in EBITDA. The liabilities of Shopify Inc. were 2.04 billion at the end of its most recent quarter ended September 29, and its total debt was $1.1 billion.

Technical Picture

This quick technical analysis looks at Shopify Inc.’s (SHOP) price momentum. With a historical volatility rate of 146.03%, the RSI 9-day stood at 45.36% on 13 May.

With respect to its five-day moving average, the current Shopify Inc. price is up by +6.62% percent or $24.99. At present, SHOP shares trade -30.55% below its 20-day simple moving average and -68.61% percent below its 100-day simple moving average. However, the stock is currently trading approximately -37.19% below its SMA50 and -73.61% below its SMA200.

Stochastic coefficient K was 26.54% and Stochastic coefficient D was 13.95%, while ATR was 49.23. Given the Stochastic reading of 52.48% for the 14-day period, the RSI (14) reading has been calculated as 41.29%. As of today, the MACD Oscillator reading stands at -29.73, while the 14-day reading stands at -46.00.

Analyst Ratings

The Benchmark Company launched its rating on Shopify Inc. (NYSE: SHOP) to a Hold in a note to investors on April 14, 2022. Shopify Inc. (SHOP) has been rated Overweight by analysts. According to 1 brokerage firm, SHOP is a sell, and 19 firms recommend it is a Hold. There are 1 analyst who say the stock is underweight. A total of 1 analyst rate Shopify Inc. stock as buy, with 20 recommending it as overweight.

With a median target price of $507.50, the current consensus forecast for the stock is $375.00 – $1250.00. Based on these forecasts, analysts predict Shopify Inc. (SHOP) will achieve an average price target of $562.89.


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