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Do Shopify Inc. (NYSE: SHOP) Provide Stability And Growth?

Shopify Inc. (NYSE:SHOP) price on Friday, March 17, rose 0.02% above its previous day’s close as an upside momentum from buyers pushed the stock’s value to $44.68.

A look at the stock’s price movement, the close in the last trading session was $44.67, moving within a range at $43.75 and $45.38. The beta value (5-Year monthly) was 1.97. Turning to its 52-week performance, $78.00 and $23.63 were the 52-week high and 52-week low respectively. Overall, SHOP moved -16.31% over the past month.

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Shopify Inc.’s market cap currently stands at around $58.34 billion, with investors looking forward to this quarter’s earnings report slated for May 03, 2023 – May 08, 2023. Analysts project the company’s earnings per share (EPS) to be -$0.01, which has seen fiscal year 2022 EPS growth forecast to increase to -$0.05 and about $0.06 for fiscal year 2023. Per the data, EPS growth is expected to be -107.80% for 2023 and 220.00% for the next financial year.

Analysts have a consensus estimate of $1.65 billion for the company’s revenue for the quarter, with a low and high estimate of $1.5 billion and $1.7 billion respectively. The average forecast suggests up to a 19.50% growth in sales growth compared to quarterly growth in the same period last fiscal year. Wall Street analysts have also projected the company’s year-on-year revenue for 2022 to grow to $5.51 billion, representing a 19.50% jump on that reported in the last financial year.

Revisions could be used as tool to get short term price movement insight, and for the company that in the past seven days was no upward and no downward review(s). Turning to the stock’s technical picture we see that short term indicators suggest on average that SHOP is a 50% Buy. On the other hand, the stock is on average a 100% Buy as suggested by medium term indicators while long term indicators are putting the stock in 100% Buy category.

47 analyst(s) have given their forecast ratings for the stock on a scale of 1.00-5.00 for a strong buy to strong sell recommendation. A total of 25 analyst(s) rate the stock as a Hold, 16 recommend SHOP as a Buy and 3 give it an Overweight rating. Meanwhile, 1 analyst(s) rate the stock as Underweight and 2 say it is a Sell. As such, the average rating for the stock is Overweight which could provide an opportunity for investors keen on increasing their holdings of the company’s stock.

SHOP’s current price about 5.22% and 1.93% off the 20-day and 50-day simple moving averages respectively. The Relative Strength Index (RSI, 14) currently prints 53.46, while 7-day volatility ratio is 4.92% and 4.54% in the 30-day chart. Further, Shopify Inc. (SHOP) has a beta value of 2.02, and an average true range (ATR) of 2.32. Analysts have given the company’s stock an average 52-week price target of $48.94, forecast between a low of $32.00 and high of $65.00. Looking at the price targets, the low is 28.38% off current price level while to achieve the yearly target high, price needs to move -45.48%. Nonetheless, investors will most likely welcome a -11.91% jump to $50.00 which is the analysts’ median price.

In the market, a comparison of Shopify Inc. (SHOP) and its peers suggest the former has performed considerably stronger. Data shows SHOP’s intraday price has changed 0.02% in last session and -28.21% over the past year. Comparatively, MercadoLibre Inc. (MELI) has moved -1.12% on the day and only 11.63% in the past 12 months. Looking at another peer, we see that PC Connection Inc. (CNXN) price has dipped -1.57% on the day. However, the stock is -17.25% off its price a year ago. Elsewhere, the overall performance for the S&P 500 and Dow Jones Industrial shows that the indexes are down -1.10% and -1.19% respectively in the last trading.

If we refocus on Shopify Inc. (NYSE:SHOP), historical trading data shows that trading volumes averaged 17.33 million over the past 10 days and 20.14 million over the past 3 months. The company’s latest data on shares outstanding shows there are 1.27 billion shares.

The 0.20% of Shopify Inc.’s shares are in the hands of company insiders while institutional holders own 65.80% of the company’s shares. Also important is the data on short interest which shows that short shares stood at 38.4 million on Jan 12, 2023, giving us a short ratio of 2.19. The data shows that as of Jan 12, 2023 short interest in Shopify Inc. (SHOP) stood at 3.02% of shares outstanding, with shares short rising to 36.03 million registered in Dec 14, 2022. Current price change has pushed the stock 28.72% YTD, which shows the potential for further growth is there. It is this reason that could see investor optimism for the SHOP stock continues to rise going into the next quarter.

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