A look into Shopify Inc. (SHOP)’s deeper side

Shopify Inc. (NYSE: SHOP) stock jumped 8.79% on Monday to $44.04 against a previous-day closing price of $40.48. With 29.39 million shares changed hands, the volume of the stock remained heavier than its average volume of 22.97 million shares. During the session, the Software – Application company that operates in wider Technology sector, reached to the highest price of $44.11 whereas the lowest price it dropped to was $41.90. The 52-week range on SHOP shows that it touched its highest point at $101.36 and its lowest point at $23.63 during that stretch. It currently has a 1-year price target of $41.48. Beta for the stock currently stands at 1.89.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SHOP was up-trending over the past week, with a rise of 13.24%, but this was up by 22.37% over a month. Three-month performance surged to 48.13% while six-month performance rose 17.91%. The stock lost -56.99% in the past year, while it has gained 26.88% so far this year. A look at the trailing 12-month EPS for SHOP yields -2.54 with Next year EPS estimates of 0.04. For the next quarter, that number is -0.01. This implies an EPS growth rate of 784.30% for this year and 180.00% for next year.

Float and Shares Shorts:

At present, 1.27 billion SHOP shares are outstanding with a float of 1.12 billion shares on hand for trading. On Oct 13, 2022, short shares totaled 41.49 million, which was 3.27% higher than short shares on Sep 14, 2022. In addition to Mr. Tobias Lütke as the firm’s Founder, Chairman & CEO, Mr. Harley Finkelstein serves as its Pres.

Institutional Ownership:

Through their ownership of 61.47% of SHOP’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 45.72% of SHOP, in contrast to 29.22% held by mutual funds. Shares owned by individuals account for –. As the largest shareholder in SHOP with 7.24% of the stake, Baillie Gifford & Co. holds 72,447,961 shares worth 72,447,961. A second-largest stockholder of SHOP, Morgan Stanley Investment Managem, holds 58,757,055 shares, controlling over 5.87% of the firm’s shares. Capital Research & Management Co is the third largest shareholder in SHOP, holding 52,632,532 shares or 5.26% stake. With a 4.45% stake in SHOP, the American Funds EuroPacific Growth is the largest stakeholder. A total of 44,470,080 shares are owned by the mutual fund manager. The American Funds Growth Fund of Ame, which owns about 1.80% of SHOP stock, is the second-largest Mutual Fund holder. It holds 18,023,520 shares valued at 625.6 million. Vanguard Total International Stoc holds 1.51% of the stake in SHOP, owning 15,108,293 shares worth 524.41 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SHOP since 45 analysts follow the stock currently. There are 14 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 24 believe that the stock is worth HOLDING, 4 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With SHOP analysts setting a high price target of $60.00 and a low target of $28.00, the average target price over the next 12 months is $41.14. Based on these targets, SHOP could surge 36.24% to reach the target high and fall by -36.42% to reach the target low. Reaching the average price target will result in a decline of -6.58% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. SHOP will report FY 2022 earnings on 02/14/2024. Analysts have provided yearly estimates in a range of $0.14 being high and -$0.17 being low. For SHOP, this leads to a yearly average estimate of -$0.04. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Shopify Inc. surprised analysts by $0.05 when it reported -$0.02 EPS against a consensus estimate of -$0.07. The surprise factor in the prior quarter was -$0.05. Based on analyst estimates, the high estimate for the next quarter is $0.17 and the low estimate is -$0.05. The average estimate for the next quarter is thus -$0.01.

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