The pandemic-era star’s comedown was brutal and Shopify (shop) It could be a perfect example of this 180 degree turn in market trends.
With investors turning away en masse after a third of the year has passed, macro trends and disappointing Q4 2021 results show the pandemic e-commerce party is well and truly over. more than two-thirds of the stock’s valuation has disappeared into the ether. Additionally, the company presented a bleak outlook, with growth expected to slow further.
Against this backdrop, it will be interesting to see if Shopify can pick up momentum again, or if further downturns await when the company reports its first quarter results on May 5.
For those fearing more pain, one positive indicator may offer a glimmer of hope.
Looking at website traffic trends, Unique Visitors (UV) increased by 32% consecutively from 162.28 million to 213.94 million. Even better, the year-over-year growth is very impressive, up 160%.
Ahead of print, RBC’s Paul Treiber believes that Shopify’s total merchandise volume “continues to grow faster than the industry,” and is expected to grow 22% year-over-year.
As such, Treiber expects first-quarter revenue of $1.24 billion, representing a 26% year-over-year increase. This figure is also consistent with consensus estimates. However, given the current volatile macro environment, Treiber said, “concerns about the resilience of consumer spending could weigh on 2H/CY22 growth expectations.”
From an investment perspective, Treiber warns that Shopify’s stock price is “likely to remain volatile in the near term,” but he still fully supports the name. “Shopify considers him one of the most compelling long-term growth stories in our article,” he summed up the five-star analyst.
Therefore, Treiber rates SHOP stock as outperforming with a price target of $1,000. The figure shows that the stock’s valuation will be 125% higher one year after him. (To see Travor’s achievements, click here)
What do you think of the rest of the street? Opinions are evenly divided. A stock’s moderated by consensus rating is based on 14 buy and holds each. But virtually everyone now thinks stocks are undervalued. An average target of $957.63 has 116% upside potential over 12 months. (See Shopify’s inventory forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are those of the featured analyst only. This content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
