Many tech stocks have been incredibly strong this past couple of months, and PreMarket Prep co-host Dennis Dick isn't confident enough to chase any of them.
Except, that is, for Shopify Inc (NYSE: SHOP). The Canadian e-commerce platform surged 140% from April to early May, making it one of the best-performing stocks on Wall Street.
And yet, Dick said Shopify is the one stock he wouldn't necessarily mind chasing.
“That’s in consolidation station right now,” Dick said. “It’s cooled off because the markets are going up. It’s kind of been this laggard trade to a certain extent. It’s obviously still a play on the lockdown.”
Shopify Vs. Zoom
Dick suspects Shopify has cooled off from its COVID-19 run because its competitive advantage over brick-and-mortars seems to have dwindled with the lifting of state lockdowns. But he considers the platform a long-term winner, especially compared to other pandemic beneficiaries.
“I like the Shopify long versus Zoom trade long-term,” he said on Tuesday's show. “...I think Shopify is worth a hell of a lot more than one-and-a-half times Zoom.”
Shopify’s market cap is $90 billion compared to the $62 billion of Zoom Video Communications Inc (NASDAQ: ZM), which Dick still considers a strong company.
“I will take Shopify at $90 billion all day long over Zoom,” he said. “Shopify is a game-changer for e-commerce... Eventually, it is going to take on Amazon.”
Options expert Nic Chahine added that the price-to-sales ratio is more favorable for Shopify than it is for Zoom.
Watch the segment in the clip below.
PreMarket Prep is a daily trading show hosted by prop trader Dennis Dick and former floor trader Joel Elconin. You can watch PreMarket Prep live every day from 8-9 a.m. ET here. The replay can be found on Benzinga's YouTube channel, and the podcast is on iTunes, Google Play, Soundcloud, Stitcher and Tunein.
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