Latest news with #SHOP
Yahoo
15 hours ago
- Business
- Yahoo
3 Big Reasons to Love Shopify (SHOP)
Shopify has been treading water for the past six months, recording a small loss of 2.9% while holding steady at $111.98. Does this present a buying opportunity for SHOP? Or is its underperformance reflective of its story and business quality? Find out in our full research report, it's free. Originally created as an internal tool for a snowboarding company, Shopify (NYSE:SHOP) provides a software platform for building and operating e-commerce businesses. TPV, or total processing volume, is the aggregate dollar value of transactions flowing through Shopify's platform. This is the number from which the company will ultimately collect fees, and the higher it is, the more chances Shopify has to upsell additional services (like banking). Shopify's TPV punched in at $47.5 billion in Q1, and over the last four quarters, its year-on-year growth averaged 31.7%. This performance was fantastic and shows the company is capturing significant demand on its platform. It also indicates that customers are highly active and engaged, driving higher transaction volumes and allowing Shopify to collect more fees. The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it's the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability. Shopify is extremely efficient at acquiring new customers, and its CAC payback period checked in at 6.9 months this quarter. The company's rapid recovery of its customer acquisition costs indicates it has a highly differentiated product offering and a strong brand reputation. These dynamics give Shopify more resources to pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments. While many software businesses point investors to their adjusted profits, which exclude stock-based compensation (SBC), we prefer GAAP operating margin because SBC is a legitimate expense used to attract and retain talent. This is one of the best measures of profitability because it shows how much money a company takes home after developing, marketing, and selling its products. Analyzing the trend in its profitability, Shopify's operating margin rose by 28.1 percentage points over the last year, as its sales growth gave it immense operating leverage. Its operating margin for the trailing 12 months was 12.7%. These are just a few reasons why we think Shopify is a high-quality business, but at $111.98 per share (or 12.7× forward price-to-sales), is now the time to initiate a position? See for yourself in our full research report, it's free. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
17 hours ago
- Business
- Globe and Mail
Shopify Stock: Bull vs. Bear
Shopify (NASDAQ: SHOP) has been a massive winner over the last decade, delivering a mind-blowing 3,664% return (as of writing) since going public in 2015. While long-term investors have benefited enormously from this rise, potential investors wonder if Shopify is a worthy stock to add to their portfolio today. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » This article aims to explore the opportunities and risks associated with owning the stock over the next few years, helping investors make an informed decision. Bull case: Shopify has been an unusual company, as it competes against Amazon in the competitive e-commerce industry, yet has remained hugely successful over the last decade -- the secret lies in Shopify's unique business model. As a start, Shopify is a software-as-a-service company focusing on enabling merchants to sell their products anywhere and everywhere. So the idea is that with the tools that Shopify offers, any seller can quickly set up an online store to sell their products globally, or employ the company's hardware-software solution (such as POS system) to sell in a brick-and-mortar store, or do both concurrently (omnichannel). In other words, Shopify aims to be the preferred partner for merchants, benefiting only when they are successful. Shopify's fee structure further amplifies its focus on merchant success. With a monthly subscription fee of $29 for its basic plan, a new merchant can open an online store with plenty of softer tools at their disposal to make their first sale. Beyond that, Shopify takes a transaction fee ranging from 0.2% to 2% for each successful sale, aligning its interest with the seller's success. This win-win arrangement helps explain Shopify's sustainable growth over the years. When merchants become successful using Shopify, new sellers get motivated to start their entrepreneurial journey using Shopify's platform. Besides, successful merchants contribute more revenue to Shopify and are also likely to become loyal customers. And that brings up another key point to highlight about Shopify, namely its recurring revenue nature. For the year ending Dec. 31, 2024, the tech company had $178 million in monthly recurring revenue, or $2.1 billion annually, from its monthly subscription fees. This revenue is extremely sticky and likely to continue growing over time. The rest of Shopify's revenue is correlated with its gross merchandise value (GMV), which is also recurring, provided that it continues to help merchants sell more products over time. For perspective, GMV grew by 26% in 2024, demonstrating the company's continued growth momentum. Shopify's solid business model makes the company extremely attractive to investors, especially considering the vast growth opportunities ahead, both locally (in online and offline retail) and internationally. If the company can remain focused on delighting its users, it is likely to attract and retain more successful sellers over time. Bear case: While there is plenty to like about Shopify, investors must also consider the downside risk of owning the stock. One thing to note is that as Shopify continues to grow in size, it may struggle to sustain its historically high growth rates, even though it is likely to continue growing at respectable rates. For instance, Shopify experienced explosive growth during the pandemic as online sales penetration skyrocketed. However, that tailwind has faded, creating some challenges for the company during the later-pandemic period. The silver lining is that Shopify has expanded beyond its online roots to offer omnichannel solutions for merchants, allowing it to continue growing its total retail market share through its brick-and-mortar solutions. Besides, as Shopify scales, it will inevitably gain more attention from giants like Amazon, which will try to fend off the younger player from taking market share. With enormous resources (financial, human talent, and technology), Amazon could pose a threat to Shopify's ongoing expansion. For example, Amazon could offer a more comprehensive set of tools (including logistics, cloud computing, and AI solutions, as well as advertising) to attract key Shopify merchants to its marketplace. Beyond competition risk, Shopify is increasingly facing macro risks, especially now that it has sellers globally. The recent tariff war has become increasingly burdensome for small and medium-sized sellers to conduct business, which could lead to either lower sales volumes or even the outright closure of their businesses. If merchants suffer, Shopify will feel the pain since its revenue is closely tied to merchants' success. It doesn't help that Shopify's stock trades at a significant premium, posing substantial rerating risks if the company fails to meet investors' expectations. As of the time of writing, Shopify's stock trades at a price-to-earnings (P/E) ratio of 110, a high figure by any standard. What it means for investors Shopify has a solid track record of execution and growth, leveraging its business model and customer-obsessed culture. These advantages strategically position it to sustain its growth momentum. Still, investors should not expect a smooth ride, as the tech company must fend off competitors while navigating turbulent macroeconomic situations, such as tariffs. And with the stock trading at premium levels, buying the stock today is not for the faint-hearted. Only those with a long time horizon (more than five years) and a strong conviction should consider buying the stock. Should you invest $1,000 in Shopify right now? Before you buy stock in Shopify, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Shopify wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor 's total average return is792% — a market-crushing outperformance compared to173%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 2, 2025
Yahoo
3 days ago
- Business
- Yahoo
Was Jim Cramer Right About Shopify Inc. (SHOP)?
We recently published a list of . In this article, we are going to take a look at where Shopify Inc. (NASDAQ:SHOP) stands against other stocks that Jim Cramer discusses. In that older episode, a caller asked whether it was time to buy back into Shopify Inc. (NASDAQ:SHOP), which had dropped roughly 20% following a disappointing earnings report. Cramer wasn't ready to recommend buying more just yet, urging caution and patience. He said: 'I think you can hold Shopify… You know, Shopify did miss, it did have some issues. I think you actually have to wait till the next quarter, see if those issues are resolved. There was a spending issue — they didn't seem to need to spend more to get business. I do like the company very much, but I'm not going to just send you in when it's not the sector in the market that's doing well.' Cramer was right to like Shopify as the stock has risen by +76.06% over the past year. Shopify Inc. (NYSE:SHOP) is a Canadian e-commerce platform that enables businesses of all sizes to create online storefronts, process payments, and manage inventory and logistics. Cramer commented on the stock's weird performance following its earnings reports and said something positive about it on May 2: 'Thursday, we get Shopify's numbers. Here's another stock that tends to sell off on good news and then rallies when people parse it out and realize that, wow, this company's more than just a poor man's Amazon.' An enthusiastic customer completing a purchase and receiving an order confirmation via one of the companies online sales channels. Overall, SHOP ranks 7th on our list of stocks that Jim Cramer discusses. While we acknowledge the potential of SHOP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-05-2025
- Business
- Yahoo
Whatever Happened to Pandemic Stocks? Some Are Showing Life Again
A handful of stocks benefited massively during the pandemic. It was an interesting time to be an investor, to say the least, and those who targeted the stay-at-home stocks were rewarded handsomely with considerable gains. A few of those stocks include Shopify SHOP, Zoom Video Communications ZM, and Peloton Interactive PTON. Below is a chart illustrating the performance of each over the last year, with the S&P 500 blended in as a benchmark. Image Source: Zacks Investment Research As we can see above, the bunch has quietly outperformed the S&P 500 over the last year, perhaps a surprise to many. Let's take a closer look at each. Shopify's platform gained widespread attention during the period as consumers shifted to online shopping. SHOP shares always felt like the strongest bet out of the 'pandemic basket' of stocks, particularly so due to the staying power of online shopping. And its earnings results have helped reinforce the idea, which have regularly been strong over recent periods. Sales grew 27% year-over-year throughout its latest period, with SHOP posting double-digit percentage YoY sales growth in ten consecutive periods. Below is a chart illustrating the company's sales on a quarterly basis. Image Source: Zacks Investment Research Jeff Hoffmeister, CFO, on SHOP's latest release – 'Q1 marked another very strong set of financial results for Shopify, with 27% revenue growth and 15% free cash flow margin. We have now achieved eight consecutive quarters of pro forma revenue growth of 25% or more and seven consecutive quarters of GMV growth greater than 20%, all while increasing our free cash flow. These metrics highlight our strong performance and dedication to supporting our merchants' success.' Zoom Video Communications' cloud-native unified communications platform combines video, audio, phone, screen sharing, and chat functionalities. It's easy to understand why shares were so beloved during the period, as many were forced onto the platform. As you can see in the chart below, sales exploded during the pandemic before leveling off significantly over recent years. Image Source: Zacks Investment Research ZM's sales grew by a modest 3% from the year-ago period in its latest release, with adjusted EPS of $1.43 climbing 6% year-over-year. Its cash-generating abilities took a big hit, with operating cash flow of $489 million down from the $588 million mark in the same period last year. Free cash flow of $463 million compared to $569.7 million in the year-ago quarter. EPS expectations for its current fiscal year do reflect positivity, with the current $5.36 Zacks Consensus EPS estimate up 5% over the last year. Growth remains muted, though, with the estimate suggesting a 3% pullback year-over-year. Image Source: Zacks Investment Research The company needs to see meaningful sales growth to get investors interested again, which it's largely struggled to achieve. Peloton shares have been hit the hardest out of the group, down more than 90% since making all-time highs back in January of 2021. Weak quarterly results have continued to drive shares lower over the past year, with PTON again falling short of our consensus estimates in its latest release. Sales of $624 million in the above-mentioned period fell 13% YoY, with its Subscription revenue also declining 4% from the same period last year. Connected Fitness Products Revenue also decreased 27% year-over-year, driven by lower sales and deliveries across all its Connected Fitness Product categories. Below is a chart illustrating the company's sales on a quarterly basis. Image Source: Zacks Investment Research Consumers just haven't found PTON's products appealing post-pandemic, resulting in the above sales decline and subscription losses. Bottom Line While stocks such as Shopify SHOP, Zoom Video Communications ZM, and Peloton Interactive PTON were all widely hailed during the pandemic, they've seemingly been shoved to the back of investors' minds since. Shopify has, and remains, the true leader of the group concerning overall performance and fundamentals. The company hasn't struggled post-pandemic like the others, with the staying power of online shopping driving the positivity. Zoom has traded sideways for what has felt like forever, with shares in desperate need of a strong quarterly release that reveals meaningful sales growth. Peloton is currently in a more concerning spot, primarily due to weak sales and an overall uninterested consumer. Out of the bunch, Shopify shares continue to reflect the most attractive opportunity. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Shopify Inc. (SHOP) : Free Stock Analysis Report Zoom Communications, Inc. (ZM) : Free Stock Analysis Report Peloton Interactive, Inc. (PTON) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
21-05-2025
- Business
- Yahoo
Shopify Inc. (SHOP) Launches AI Store Builder for Merchants as Part of Latest Updates
On Wednesday, Shopify Inc. (NASDAQ:SHOP) rolled out a series of new AI-powered features designed to enhance customer experience. These included the 'AI Store Builder' to help merchants quickly set up online storefronts using descriptive keywords. While the company has launched several AI tools in the past, this is the first integrated feature that fully automates the website creation process. The AI Store Builder uses a single prompt to generate three store layouts with text and images, simplifying the onboarding process for merchants designing their online presence. Vanessa Lee, Vice President of Product at Shopify Inc. (NASDAQ:SHOP) stated the following on the AI Store Builder: "Instead of just having a merchant click and drag and fill out text fields on how they want their site to look - which can be really daunting for some - we thought why not ask them more open-ended questions and set up their store in the best likeness we can imagine, using AI.' An enthusiastic customer completing a purchase and receiving an order confirmation via one of the companies online sales channels. Shopify Inc. (NASDAQ:SHOP) also introduced 'Horizon', a theme foundation that allows users to create and customize their storefronts by using preset designs or generating their own from scratch. Additionally, the company also levelled up 'Sidekick'. It can now solve more complex problems when users ask questions through voice or chat. These recent updates are part of Shopify Inc. (NASDAQ:SHOP)'s broader push into artificial intelligence to draw more merchants to its platform. While we acknowledge the potential of SHOP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SHOP and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: ChatGPT Stock Advice: Top 12 Stock Recommendations and 10 Cheap Rising Stocks to Buy Right Now. Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
