How Bearish Are Investors Regarding Shopify Inc. (SHOP)?

On December 03, 2019, Shopify Inc. (NYSE:SHOP) shares gained 5.99% or 19.82 points to close at $350.66 with a heavy trading volume of 3.269 million shares. It opened the trading session at $321.01, the shares rose to $351.31 and dropped to $320, the range by which the price of stock traded the whole day. The company now has a market cap of $41.2 billion and currently has 117.35 million outstanding shares. Shopify Inc. (SHOP) stock has accumulated 10.7 percent of market value in 21 trading days.

SHOP stock’s trailing 3-year beta is 1.17, meaning there will be a greater rate of return, although posing a higher risk. The part of a firm’s profit given to each outstanding share of regular stock was -$1.13 share in the trailing 52 weeks. The stock’s value surged 153.28 percent year to date (YTD) compared to a rise of 129.7 percent in 52 week’s period. The firm’s shares are still trading -14.39 percent below its 1-year high of $409.61 and 198.08 percent up from 52-week low of $117.64. The average consensus ranking on the company is 2.3, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a sell.

Shopify Inc. (SHOP) is most likely going to rise 3.11 percent in the coming 12 months, as per price target approximations compiled by finviz. Nevertheless, they have set the price target at a $481-month high price target. This represents a whopping 37.17 percent increase from the current trading of shares. The 52-week median price target given by the analysts is $370, which means a return possibility of 5.52 percent in comparison with the closing price of the stock of $350.66 on December 03. The lowest price set for the stock is $275 — just above -21.58 percent from SHOP share price now.

Past records have indicated that shares in Shopify Inc. rose on 13 different earnings reaction days and we have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings. Investors will get the next hint of SHOP’s Q4 earnings on February 12. Analysts are predicting revenue to climb 40.2 percent to $482M in the financial fourth quarter, while EPS will soar by about -7.69 percent to $0.24 per share. In the last quarter, it earnings of -$0.29 per share came worse than the -$0.04485, adjusted, expected by Thomson Reuters consensus estimate. Revenue for the quarter was $343.86M, topping the $327.52M analysts had expected. Earnings are seen to rise by -46.3 percent this year, 395.7 percent in the coming year and the trend continues by 57.41 percent every year in the next 5 years.

The stock is lingering around the initial support level of $330. After this, the following support is at the zone of $309.35. Up until the time the SHOP stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 64.48 on the daily chart, and this may be a cause for concern. In case the price goes below $309.35 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $361.31 level may cause a pull-back move approaching $371.97 mark.

Shopify Inc. has a 55.6% gross profit margin, with its operating margin around -8.5%. Alongside this, the company’s net profit margin currently stands at -9%.