Best Stock to Buy Right Now: Amazon vs. Shopify
Shopify (SHOP) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.
The scorching post-election rally that lifted stocks across all market capitalizations and verticals paused this past week. Even post-earning surges in select CE 100 names were not enough to lift the overall index, which slipped 1.5%.
Shopify Inc. (NYSE: SHOP) has cemented its position as a leader in the e-commerce sector.
The e-commerce software company is living up to all the hype -- and then some.
Shopify Inc. reported strong Q3 results this week, beating earnings and revenue estimates, driven by robust growth in both segments. Shopify is seeing strong growth in all key platform metrics, including GMV, gross profits and especially free cash flow. The firm's free cash flows are growing twice as fast as its revenues and Shopify is expanding its FCF margins.
Shopify (SHOP) could produce exceptional returns because of its solid growth attributes.
"We don't know the rules of the game yet" under the next Trump administration, says Jerry Sneed. He's cautious on the first half of 2025 despite showing optimism that the S&P 500 can break 6,100 by the end of the year.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Shopify's Q3 earnings exceeded expectations with $0.35 EPS and $2.16 billion revenue, showcasing strong margins and earnings growth despite challenging consumer conditions. Shopify's valuation metrics, including forward P/E (98.67x) and forward P/S (16.25x), are significantly higher than industry peers, indicating potential valuation risks. Recent bullish rallies have pushed Shopify's stock into overbought territory, with key support levels at $77.12 and $65.86 critical for maintaining a bullish outlook.
Shopify's 3Q FY2024 earnings indicate strong underlying demand, with YoY growth accelerations in revenue and GMV, driven by successful price hikes and continued growth in merchants. The 4Q outlook could be even stronger, projecting higher sequential growth acceleration, significantly beating market consensus, with more volume growth expected due to the holiday season. Operating margin is expected to significantly improve in 4Q, reaching all-time highs, contributing to robust earnings growth and strong FCF generation.
The company's platform is resonating with merchants of all sizes.