|Bid||611.82 x 0|
|Ask||611.99 x 0|
|Day's Range||602.11 - 625.50|
|52 Week Range||205.07 - 626.20|
|Beta (5Y Monthly)||1.20|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
While the market reaches new highs, Square (NYSE:SQ) stock remains in neutral. Square does trade at a high valuation. But with analysts predicting growth deceleration since August, investors have been less confident in giving this stock an even higher valuation.Source: Jonathan Weiss / Shutterstock.com Is Mr. Market right in discounting Square's future prospects? Is Square a software-as-a-service pioneer like Shopify (NYSE:SHOP)? Or is the company more like PayPal (NASDAQ:PYPL) or legacy payment processors like Fiserv (NASDAQ:FISV), Visa (NYSE:V) and Mastercard (NYSE:MA)? Back in October, a Barron's article made the case for the latter. In other words, implying more downside for SQ stock.Add in increased competition, and Square does not look like a great opportunity. So, what's the verdict? Let's dive in, and see why SQ stock is most likely going to be stuck in neutral in 2020.InvestorPlace - Stock Market News, Stock Advice & Trading Tips What Does Fintech Consolidation Mean for SQ Stock?I've before discussed how the competition's heating up for Square. Square's merchant platform faces growing competition from established players like Fiserv. In retail peer-to-peer payments, Square's Cash App goes toe-to-toe with PayPal's Venmo. Square can still expand its merchant and consumer businesses. But customer acquisition costs could skyrocket as the market becomes crowded. * Invest in America's Most Trusted Brands With These 7 Stocks to Buy Square has its work cut out for it. Yet, the company could be an ideal bolt-on acquisition for a larger financial services company. Potential acquirers like Visa or Mastercard come to mind. InvestorPlace contributor Dana Blankenhorn expressed similar sentiments in his Dec. 30 SQ stock analysis. Blankenhorn argued that strategic buyers could pay a 33% premium to its then-trading price of $63.50 per share. In other words, $84.45 per share.Yet, this article came out before Visa's announced acquisition of Plaid. Plaid provides the back-end technology that allows fintech apps like Coinbase and Robinhood to link with your bank account. Why is this recent deal relevant to SQ stock? It could mean Square isn't the type of company deep-pocked payment companies are looking to buy.By owning the key gatekeeper between banks and fintech startups, Visa may not need to buy a company like Square to stay relevant. If businesses and customers pivot toward fintech startups in lieu of legacy payment processors, Visa can still win by owning Plaid. Visa could also leverage its ownership of Plaid to compete with Plaid's existing clients.Square was in talks to buy Plaid in 2018. Unfortunately, they couldn't get their hands on this hot asset. Doing so would've given them in edge against both startup rivals, as well as legacy payment providers. Square Needs Time to Grow Into Its ValuationSQ stock currently trades for 88.7 times estimated 2019 earnings, and 71.5 times estimated 2020 earnings. In contrast, payment rivals PayPal trades for 38 times 2019 earnings, and 33.3 times 2020 earnings. Their other main rival, Fiserv, trades for 30 times 2019 earnings, and 23.6 times projected 2020 earnings. Square's faster growth rate does justify a valuation premium. But with risks growth could decelerate, paying 71.5 forward earnings doesn't look like a smart move.Could Square grow into its valuation? It could. But even Square's high projected earnings growth of 23% implies it would take a while. In the meantime, investors may start giving Square a lower earnings multiple, sending shares to lower levels.So what's the solution? As InvestorPlace's Josh Enomoto recently wrote, the company's Square Capital lending business could move the needle long term. But investors are well aware of Square's intent to become a fintech "financial supermarket." Square could win big with this aggressive growth strategy.But looking at the competitive environment, it seems Square is sandwiched in the middle. On one hand, you have new startups that could outfox Square via innovation. On the other hand, deep-pocketed rivals to use scale to hamper Square's growth plans.That's not to say that Square will be muscled out of business. Yet, growth above expectations seems less likely. With this in mind, it seems SQ stock is more likely to come down valuation-wise than go higher thanks to expectation-exceeding growth. Bottom Line: SQ Stock Could Stay in NeutralSquare has much potential to further disrupt financial services. However, I do not believe the company's valuation premium to payment peers like PayPal is sustainable. If February's earnings call indicates further growth deceleration, SQ stock could fall to a valuation closer to that of peers.Square's move to become a fintech "financial supermarket" further cements the argument that the company is not comparable to a SaaS name like Shopify. Square deserves a growth premium to PayPal, Visa and others, but not a forward price-to-earnings ratio of 71.5.So what's the call? Stay away from SQ stock. The company could surprise come February. But chances are Square shares tread water at best in the coming year.As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks on the Move Thanks to the Davos World Economic Forum * Invest in America's Most Trusted Brands With These 7 Stocks to Buy * 7 Earnings Reports to Watch Next Week The post Expect Square to Remain Stuck in Neutral appeared first on InvestorPlace.
Investors who demand value may take a quick "pass" on Shopify (NYSE:SHOP) by looking at its price-to-earnings ratio near 2,000 times. Yet momentum and growth investors may point to its exceptionally strong historical and future growth rates.Source: Beyond The Scene / Shutterstock.com In the last quarter, strong revenue continued but as profits disappointed, the dip in Shopify stock proved short-lived.So, how much more upside does Shopify bring to shareholders, now that the stock closes at 52-week highs almost daily?InvestorPlace - Stock Market News, Stock Advice & Trading Tips Weak Third Quarter Is TemporaryShopify reported fiscal 2019 third-quarter earnings on Oct. 29, and announced that its revenue grew 45% year-over-year. Gross merchandise volume came in at $14.8 billion, an increase of 48%, yet the company posted an adjusted net loss of $33.6 million. CEO Amy Shapero said, "Our strong results in the quarter were driven in part by the success of our international expansion, which is just one of the many ways we are investing in the platform." * The 7 Stocks That Cautious Investors Should Sell Now And just look at the provision for income taxes and investors will soon realize that the international expansion costs $48 million. This is a short-term pain that will lead to long-term gains. How? Shopify's addressable market will expand globally. In the quarter, the company posted strong cash flow and adjusted operating income of $10.5 million. Above all, for the full-year 2019, Shopify forecast adjusted operating income in the range between $27 million and $37 million. 2020 OutlookSource: Chart by FinboxShopify's business is positioned for considerably stronger growth in 2020. It faces no real competition in the multi-channel business-to-business space or the direct-to-consumer markets. So, this year, chances are good that its earnings per share will beat consensus estimates.Still, analysts are bullish on Shopify stock. Also, there are 9 buys and 7 holds on the stock. But the average price target is $423.15. Sure enough, a 10-year discounted cash flow EBITDA exit model might assume revenue growth slowing to 15%. In that scenario, the stock trades close to the fair value already.Source: Chart by Stock RoverOn the Stock Rover research report, Shopify stock has a value score of 56 (based on such ratios as enterprise value-to-EBITDA, P/E and price-to-sales). But its sentiment score is 89, based on the stock's days since hitting a 52-week high, moving average convergence/divergence (MACD) and short interest. Here is Shopify's valuation compared to the S&P 500 and its broader industry.Source: Chart by Stock RoverAnd here is Shopify's sentiment profile. Looking at these two tables it is clear that Shopify stock scores higher than both its broader industry and the S&P 500 when it comes to sentiment score. But its value score does ring in below that of the major index. Strong Quarterly Report ExpectedShopify shared Black Friday sales on Dec. 3, 2019. It showed that it topped over $2.9 billion in sales. In other words, this is up sharply from last year's $1.8 billion-plus levels. It said that the "sales demonstrate the power of borderless commerce and how independent businesses and direct-to-consumer brands around the world have become the heroes of Black Friday/Cyber Monday."After watching Macy's (NYSE:M) and Kohl's (NYSE:KSS) struggle to compete with the online marketplace, Shopify's dominance in the online space is unquestionable. As a side note, China's Baozun (NASDAQ:BZUN) is nowhere near comparable to Shopify. For example, Shopify is rated No. 1, according to the G2 website, which is a Chicago-based peer-to-peer review site. The stock market also reflects the disparity, with Baozun at risk of falling lower. After Shopify reports quarterly results on Feb. 12, the stock may break out to new highs if its profits exceed consensus estimates. My Takeaway on Shopify StockShopify's exceptionally strong annual revenue growth is unstoppable. Earnings will grow at almost 50% annually, justifying the stock's high valuations. Traditional value investors need to ignore metrics like price/earnings-to-growth, the price-to-book ratio and P/E ratios for now. Buying interest in the stock is strong and may accelerate as the company grows at a high rate. By 2024, revenue may top $7.5 billion, over six times where it is today.As of this writing, Chris Lau did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 7 Stocks That Cautious Investors Should Sell Now * 7 Healthcare Stocks With 100% Street Support * 3 Chinese Stocks to Buy, Sell, or Play from Either Side The post Why Shopify Is Set to Smash Quarterly Earnings Expectations appeared first on InvestorPlace.
Is Shopify (NYSE:SHOP) the future of eCommerce? Investors are increasingly betting that Shopify stock will be the next online star.Source: Jirapong Manustrong / Shutterstock.com A new wave of eCommerce is forming and threatens Amazon (NASDAQ:AMZN). Shopify demonstrated that fact with its Black Friday sales last holiday season when its platform averaged nearly $1 million in sales every minute. Impressive, to say the least.As Amazon has gotten busy with side projects such as selling groceries and trying to disrupt UPS (NYSE:UPS) and FedEx (NYSE:FDX), they've seemingly given a lot of ground to rivals in their core online retail space. And Jeff Bezos' headline-grabbing behavior has raised eyebrows as well.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAll in all, Amazon stock is down nearly 10% since its peak last summer. That's terrible in a time when nearly all major tech stocks are flying to new all-time highs, by comparison. * Invest in America's Most Trusted Brands With These 7 Stocks to Buy Shopify has taken advantage of Amazon's weakness. Not only is Shopify growing at a breathtaking rate, it's also building up a narrative that it will be the first company capable of taking the fight to Amazon's core business in years.Unfortunately, for anyone buying today, that narrative has driven SHOP stock to an exceedingly high valuation, and the optimism continues; Shopify hit new all-time highs this week. Shopify: Lock in Trading GainsShopify has gone on an absolutely exhilarating tear over the past year. Since the December 2018 low, Shopify stock has nearly quadrupled. Just over the past two months, the stock is up 50%. This is not normal. As great a company as Shopify may be, its fundamental value simply hasn't increased 50% in two months, or 300% in a year.What's driving the move? M&A chatter may be part of it. Last month, CNBC's Jim Cramer suggested that larger companies were taking a look at acquiring Shopify. Though, with the company's market capitalization now over $50 billion, there's only a few tech companies big enough to buy a company of Shopify's size with ease.Unless a merger hits, there's little to drive the stock price in the short run. The last earnings report was actually rather underwhelming; the share price run seems largely driven on sentiment rather than quickly improving fundamentals. The Company's Long-Term Investment ProspectsTo be clear, Shopify isn't quite a slam dunk buy and hold investment at this price either. There's certainly the possibility that Shopify is able to become the next Amazon. The current $50 billion market cap still leaves massive upside potential in that case. However, the market is fully pricing in near-term gains.In fact, take a look at Morningstar's Dan Romanoff's analysis. He gives Shopify some fairly ambitious assumptions over the next five years, and still finds the stock to be more than 50% overpriced. Romanoff wrote that:"Our fair value estimate for Shopify is $175 per share, which implies an enterprise value/sales multiple of 11 times, adjusted price/earnings multiple of 576 times, and a 0% free cash flow yield. Our forecast includes a continued shift to merchant solutions from subscriptions. We model total revenue growth of 45% in 2019, decelerating to 23% in 2023, representing a five-year compound annual growth rate (CAGR) of 31%."Needless to say, for investors let alone short-term traders, a pullback to $175 would be a rather painful fall from the current $465 price. Great world-changing companies often fall precipitously at one time or another despite being home run investments; Amazon famously lost more than 90% of its value in the dot-com bust. Is Shopify Really a Monopoly in the Making?If Shopify can truly grow into the next Amazon, it's still an easy hold today, despite the sharp potential drop in the short-term. However, there are reasons to be skeptical of just how powerful Shopify's position is.A recent article in ModernRetail noted how Shopify's platform has had notable issues scaling, and sometimes crashes when well-known internet personalities such as Jeffree Star and Shane Dawson have launched stores on Shopify.That author quoted an eCommerce agency CEO who pointed out Shopify's short-comings:"There's a big gap with what [Shopify's] enterprise offering is and other enterprise offerings out there," the CEO said. "It's definitely not true enterprise […] Once you're doing $10 million to $20 million online and once you have a certain amount of complexity, it becomes very difficult to scale on Shopify," they said. Shopify is a nice plug-and-play solution for up-and-coming e-commerce ventures. But what happens if the company's biggest customers graduate to more sophisticated platforms like WooCommerce or Magento?It's the Square (NYSE:SQ) problem all over again - attracting tons of small business is great, but if firms leave your platform for greener pastures as they get bigger, overall revenue growth could come up well short of expectations. Shopify Stock Bottom LineRealize that Shopify's share price has run far ahead of its current value today. If you're a swing trader, there's no reason to stay long here. Sell into the jaw-dropping 50% in two months rally. The stock market won't keep going up every day forever, there's nothing wrong with turning some paper gains into real cash while the market is euphoric.If you're a long-term investor and are willing to hold Shopify for the next five or ten years through thick and thin, then there's still a solid case for hanging on to its shares today. If the company keeps up its current growth trajectory, today's valuation will hardly matter. That's a huge if, though.For a lower-risk play on second-wave eCommerce, consider some of the Software-as-a-Service companies that provide back-end support to platforms like Shopify.Avalara (NYSE:AVLR), for example, provides sales tax collection and accounting functions to online sellers and has built-in support to platforms like Shopify and Wix (NASDAQ:WIX). Avalara is growing at 40%/year and has a much more palatable valuation at least for the time being.At the time of this writing, Ian Bezek owned FDX and AVLR shares. You can reach him on Twitter at @irbezek. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks on the Move Thanks to the Davos World Economic Forum * Invest in America's Most Trusted Brands With These 7 Stocks to Buy * 7 Earnings Reports to Watch Next Week The post If You're Not in It for the Long Haul, Take Profits on Shopify Stock Now appeared first on InvestorPlace.
Just after the market opened on Wednesday Shopify’s share price reached an all-time high of $476.64, putting the online shopping platform’s market value at $54bn. Today, Shopify represents a buoyant bet on online retail continuing to gnaw away at big box bricks and mortar; the Street’s finest think by 2025 its revenues will sextuple to just under $10bn from 2019’s estimates, with its operating profits exploding from $33m to $1.9bn as it reaches scale. In case you’ve never heard of the Canadian company, Shopify provide a range of services — from the back-end infrastructure, to user analytics and payment processing — for over 1m aspiring and established consumer brands.
In this market, the easiest way to miss out on gains has been to argue that a stock is "too expensive," and Shopify (NYSE:SHOP) has been no exception. Shopify stock has looked expensive for years -- but it has been one of the market's best plays over that stretch.Source: Beyond The Scene / Shutterstock.com Indeed, Shopify stock has almost quadrupled from December 2018 lows. It's gained over 2,800% from its 2015 initial public offering price of $17. For much of its time on the public markets, skeptics -- myself included -- have decried its valuation and believed a reversal was imminent.Of course, SHOP stock isn't alone. Particularly in tech, there is no shortage of stocks that have climbed the proverbial "wall of worry" relative to valuation: Netflix (NASDAQ:NFLX), Amazon (NASDAQ:AMZN) and Roku (NASDAQ:ROKU) are just three of the most well-known examples.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAnd for these names, multibagger gains aren't a sign that the market "isn't paying attention" or "doesn't care about valuation." Yes, valuations have been, and still are, seemingly expensive. But the growth potential for these companies is enormous. * 10 Stocks to Buy as the 2020 Presidential Election Approaches In fact, in many cases, the bulls are paying closer attention to valuation than the bears, for instance by focusing on underlying profitability at Amazon instead of dismissing the stock based on near-term price-to-earnings multiples.The catch with Shopify stock is that even taking the detailed perspective and giving the company credit for its impressive performance, it's increasingly difficult to support a share price nearing $500. This is a wonderful business, and it's worth repeating: bears and skeptics have consistently been wrong about this stock. Perhaps that will continue -- but at some point, SHOP has to slow down. Right? Shopify's FundamentalsJust looking at the near-term fundamentals, Shopify stock looks like a classic bubble. The company's guidance for 2019 projects roughly $1.55 billion in revenue and an adjusted operating income of $27 million to $37 million.We'll assume, as has historically been the case, that Shopify is guiding conservatively, and peg 2019 revenue at $1.6 billion and operating profit at $50 million. Using those figures and backing out its roughly $2.7 billion in cash and investments, SHOP stock trades at about 1,000x operating profit and over 30x sales on a trailing basis.Those are staggering multiples. But they don't mean that Shopify stock is a sell per se. Again, it's shortsighted to dismiss a stock based solely on trailing multiples. Although it's also a bad idea to buy a stock simply because of a low price-to-earnings or price-to-sales ratio.But that's what those multiples mean. Even taking the long view, even giving Shopify credit for perfect execution, it's simply difficult to grow into that kind of valuation. The Long-Term ViewSHOP bulls have to believe the stock can at least double over the next decade. Such performance would suggest annualized returns just above 7%. It's easy to forget in this market, but 7% annual appreciation is excellent, particularly when 10-year Treasury bonds are yielding less than 2%.Roughly speaking, Shopify has to reach a market capitalization over $100 billion to hit that bogey. That in turn suggests at least $2 billion in net income in 2029, giving credit for a 50x P/E multiple at that point.Again, Shopify is generating $1.6 billion in revenue this year. That figure will rise exponentially, of course. It could rise tenfold over the decade, in fact: that would require a roughly 26% annualized growth rate. Wall Street sees revenue increasing 36% in 2020, and the company's move into fulfillment offers another top line boost. Growth will slow over time, but there's certainly a path to $16 billion in 2029 revenue.But how profitable will it be? Even assuming revenue does grow to $16 billion, Shopify needs operating margins around 15% to hit that $2 billion after-tax target. That too, is doable -- perhaps. Shopify's operating margins this year probably will be close to 3%. Sales and marketing spend, currently 29% of revenue on a non-GAAP basis, will decline as a percentage of sales as the top line grows. So will general and administrative expenses.All that said, gross margins here are 56% so far this year due to the heavy proportion of payment processing revenue. Software plays can get operating margins over 20%, but Shopify is only a partial software play. The payment processing business simply doesn't scale the same way software businesses do. Shopify might get to 15% operating margins -- but it's not guaranteed to get much further. Another Way to Look at Shopify StockLooking at that model, it's simply difficult to justify Shopify stock's current price. 26% annual revenue growth for a decade would be a stunning achievement. 15% operating margins would be an impressive accomplishment (though, to be fair, PayPal Holdings (NASDAQ:PYPL) has an adjusted operating margin nicely past 20%). Even the 50x out-year P/E multiple is hardly conservative. Move that figure to 30x and Shopify stock returns less than 5% a year.But even coming from a different angle, the rise in SHOP stock is problematic. In trying to make the fundamental case last year, I noted that market share figures relative to Amazon and eBay (NASDAQ:EBAY) did suggest potential upside, or at least supported what was then a stock price around $375. SHOP has gained another 25%-plus since then. Its valuation now is nearly double that of eBay and Square (NYSE:SQ).And while it's tough to model much upside, downside hasn't been modeled in either. We still have zero idea what Shopify looks like in a recession -- but we do know that small businesses, still the company's core clients, are the first to struggle in a macro downturn. Even that issue aside, growth is likely to slow if the economy does.Even a market downturn can have an effect. SHOP tumbled in 2018's fourth quarter, declining over 25% in a matter of weeks starting in late August.Again, the answer to all these concerns is simple: they've existed in some form for years now, and Shopify stock keeps climbing. The bears have been wrong, while bulls have profited greatly. Perhaps that will continue for the time being -- but I'm skeptical it will continue forever.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy as the 2020 Presidential Election Approaches * 5 Dividend Stocks With Low Payout Ratios and High Yields * 4 Post-Holiday Retail Stocks Still Worth a Look The post Overvalued Shopify Stock Continues to Prove Bears Wrong appeared first on InvestorPlace.
The mattress industry, long known for its commodity products and ruthless competition, isn’t typically fodder for a Tech Trader column. Witness the rise of Casper Sleep, a mattress start-up valued at just over $1 billion in the private market.
Cloud computing play Paycom stock leads four top stocks to consider for the long-term. Fiserv stock, UNH stock and Masimo stock also make the list. Here's why.
While Shopify Inc (NYSE: SHOP ) has strong long-term earnings growth prospects, these seem to be “fully reflected” in its current share price, according to Loop Capital. The Analyst Loop Capital’s Anthony ...
While exit activity may have slightly cooled off during the last half of 2019, the year that just ended set a huge record for venture capital exit value, according to a report released Tuesday by PitchBook and the National Venture Capital Association.
Shopify was a huge winner in 2019. Earnings are booming and the company plans to compete more with Amazon. But is SHOP stock a good buy now?
Investors are increasingly optimistic about the company's e-commerce infrastructure platform, services, and tools.
Shopify's ambitious plan to building a U.S. distribution network could bring in $800 million in revenue while losing $200 million through 2023, estimates a Mizuho Securities analyst.
Shopify is a leader in cloud e-commerce solutions and is well-positioned to generate robust revenue growth, especially given the favorable secular trends, Panigrahi said in the initiation note. Shopify is targeting a market that is large, estimated at around $30 billion and expected to sustain strong growth, the analyst mentioned. The recently launched Fulfillment solution enjoys synergies with the company’s products and merchant data, Panigrahi noted.
As stock performances go, PayPal's (NASDAQ:PYPL) gains in 2019 were probably a disappointment for shareholders.Source: JHVEPhoto / Shutterstock.com Normally, a 29% return on any stock, let alone one of the world's leading payment processors, would be considered a success.But 2019 wasn't just any year. The S&P 500 delivered its second-best performance of the decade, up 28.9%. Furthermore, while PayPal stock gained almost 30%, it lagged the S&P 500 Data Processing & Outsourced Services Index by 15 percentage points.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn 2020, with expectations much lower for the S&P 500 and markets in general, if PYPL were to deliver a repeat performance, the stock price would close the year around $140.Here are three things PayPal needs to do in the next 12 months to ensure PYPL stock hits $140. Partnerships Have to Reap RewardsOn Dec. 30, PayPal CEO Dan Schulman announced the company was expanding its partnership with Latin America's biggest e-commerce marketplace, Mercadolibre (NASDAQ:MELI), a stock I've long favored. * 8 of the Strangest Stocks Worth Your Time In March 2019, as part of a $1.8 billion equity offering by Mercadolibre to expand and grow its e-commerce business, PayPal invested $750 million in the Argentinian company. "Digital commerce in Latin America is experiencing tremendous growth and MercadoLibre is well-positioned for continued leadership," Schulman said at the time. "We've been impressed with the digital commerce and payments ecosystem Marcos [Galperin, MELI CEO] and his team have built."However, that was just an investment.2019's end-of-the-year announcement expands the relationship to include PayPal as a payment option for online checkout via Mercado Pago in Brazil and Mexico. In addition, PayPal will be accepted in the MercadoLibre marketplace in Brazil and Mexico for cross-border purchases.As a result, PayPal's 300 million customers can now use the payment processor to buy stuff online in two of Latin America's largest commercial markets.I said in November that if you could afford to buy both PYPL and MELI, you should. Based off December's announcement, I would double down on that sentiment.In the year ahead, I want to see tangible progress from this partnership. If we do, PayPal's valuation multiples could start to creep higher, a necessity if PYPL stock is to hit $140, let alone $200. Additional Revenue Streams for PYPLPayPal announced Jan. 6 that it had completed the $4 billion purchase of Honey, a Los Angeles-based digital shopping and rewards platform."The addition of Honey to our platform enables a significant step forward in our commitment to provide powerful services and tools for merchants and consumers, move beyond our core checkout proposition and significantly enhance the shopping experience for our 300 million consumers and merchants," Schulman stated in a company release. Whether we're talking about PayPal, Square (NYSE:SQ), Shopify (NYSE:SHOP), or any of the other fintech companies participating in and around e-commerce, they all want to offer as many products or services to merchants and customers as they possibly can.The Holy Grail of e-commerce is to become a one-stop shop for merchants and buyers alike. We're not there quite yet, but moves like acquiring Honey bring PayPal that much closer. Business Insider contributor Mike Jaconi said it best in a Jan. 7 opinion piece:"When it comes to loyalty, every company, from multi-billion-dollar businesses like Amazon to your favorite mom-and-pop coffee shop, wants to do the same thing: Convince you to come to them first -- and not their competitors -- as frequently as possible."Honey's entire business model is built on driving commerce. Now, not only can Honey influence what people buy, but it can also influence how they buy those products.That's huge. In 2020, I'll be watching Honey's overall effect on PayPal stock. Continue to Monetize VenmoOne of the things Sanford Bernstein analyst Harshita Rawat would like to see from PayPal in 2020 is further monetization of Venmo, its peer-to-peer payment system. Toward the end of 2019, reports surfaced that Venmo was losing users to Square's Cash App, a sign that the stakes might be higher for PayPal in 2020. According to Macquarie analyst Dan Dolev, Cash App is doing well in Venmo strongholds such as New York, California and Massachusetts. Up until now, Venmo's owned the markets on both coasts, with Cash App ruling in the South and Midwest. However, with new features being introduced such as commission-free stock trading, Cash App is getting the attention of new user demographics, forcing Venmo to keep pace.In the year ahead, I'm not so concerned with the monetization of Venmo as I am about user base losses. Square is catching up, and while I like both stocks, that ought to be a big concern for PYPL shareholders. The Bottom Line on PayPal StockIn 2019, Square stock was soundly beaten by PayPal. In 2020, I think the battle between the two payment processors is going to be a lot closer. Who will win? I couldn't tell you. Long-term, I like PYPL stock. But if PayPal takes care of these three issues, I think it's got a shot at hitting $140.At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 8 of the Strangest Stocks Worth Your Time * 7 Stocks to Buy That Trump's Tax Cut Truly Rewarded * 5 Stocks That Could Double in 2020 The post Three Things PayPal Stock Needs to Do to Hit $140 in 2020 appeared first on InvestorPlace.
If you're looking for stocks to buy to double your money in 2020, you might want to look beyond the S&P 500.Don't get me wrong. The S&P 500's total return of 28.9% in 2019 was one of the best performances the index has seen in decades.However, a quick screen shows that only a few S&P 500 stocks doubled over the past year. But, if you broaden the search to include all U.S.-listed stocks with market caps exceeding $2 billion, the number of stocks doubling in value in 2019 jumps dramatically to over 70.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBroken down by sector, healthcare and technology stocks had the best results in 2019 -- with 29 and 38 doubling over the past year, respectively. The remaining seven sectors had between three and eight stocks double in 2019. * 7 Stocks That Are Screaming Buys Right Now Of the more than 70 stocks that doubled year to date, here are seven stocks to buy as of Jan. 2 that I believe will deliver a repeat performance in 2020. Stocks to Buy: Shopify (SHOP)Source: Jirapong Manustrong / Shutterstock.com Shopify (NYSE:SHOP), what I consider to be one of Canada's best tech stocks, gained 187% in 2019.As the e-commerce platform's stock went higher in 2019, the number of stories that appeared recommending shorting SHOP stock increased dramatically. Currently, Shopify has 4.72 million shares short, which is a lot until you consider that it only takes two days to cover based on its average daily volume -- making a short squeeze very difficult to pull off.As I stated in November, as long as Shopify's monthly recurring revenue (MRR) continues to grow by double-digit percentages, it will continue to deserving of a growth-company valuation. MRR grew by 41.4% and 33.8% over the past two years.More importantly, it took Shopify 19 months to go from 600,000 subscribers to 1 million subscribers. At 25% compound annual growth, Shopify ought to hit 2 million subscribers by the end of 2022.Another reason to like Shopify's chances of doubling for a second-consecutive year is that CEO Tobias Lutke doesn't believe in spending all day and night at work."I'm home at 5:30 pm every evening. My job is incredible, but it's also just a job. Family and personal health rank higher in my priority list," Lutke tweeted recently. Roku (ROKU)Source: Fozan Ns / Shutterstock.com If you bought Roku (NASDAQ:ROKU) at the end of 2018, you're sitting pretty early in 2020. The stock rose 337% throughout 2019.While it's doubtful that ROKU stock will deliver a repeat performance in 2020, I think the odds are high that it will generate 100%-plus returns over the next year. I believe it will continue to grow its international business while also improving its advertising platform.In my eyes, Roku was a "Stock of the Year" candidate in 2019 because it continued to grow the number of active accounts and streaming hours from those accounts. In the third quarter, Roku increased the average hours streamed per account by 22% to 318.9.As long as it continues to remain a relatively neutral aggregator of TV shows and movies through the Roku platform and Roku Channel, I don't see anyone taking market share from the company. * 9 Boring Stocks to Buy You Should Never Let Go Of I would suggest that given Roku's volatility, you put aside some cash to buy some more ROKU stock when it experiences a correction in the next year. In September 2019, ROKU lost around 40% of its value in less than a month. StoneCo (STNE)Source: Shutterstock When I think of the name StoneCo (NASDAQ:STNE), for some reason, I think of a paper business. Perhaps it's that whole rock, paper, scissors thing.Anyway, StoneCo isn't a paper company, but a Brazilian payment processing stock that's 4.3% owned by Warren Buffett and Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B).How's that for an endorsement?In 2019, StoneCo's stock gained 116% thanks to double-digit growth in both revenues and profits. In Q3 2019, revenues and adjusted net income increased by 62% and 126% year-over-year, respectively.The company operates in Brazil, where the economy and currency are on the mend. And, digital payments through debit and credit transactions account for just 40% of all transactions in the country -- suggesting that StoneCo's growth trajectory is very healthy.In addition to processing payments, just like Square Capital does, StoneCo loans money to small- and mid-sized customers. In the third quarter, outstanding loans increased by 333% to 13,000.I continue to favor disruptive companies. Especially in emerging markets such as Brazil, where the penetration is so much lower than in North America and Europe. Universal Display (OLED)Source: Daniel Pieterson / Shutterstock.com You can't keep a good stock down.In November 2018, I recommended investors buy Universal Display (NASDAQ:OLED) stock on the dip. OLED had lost almost 42% of its value through the first 10 months of 2018. Since then, it's up 97%, with all of the gains coming in 2019.In 2013, I recommended buying Universal Display as one of five stocks to buy for the next 20 years. My rationale was simple: OLED stands for organic light-emitting diode. It had more than 3,000 patents related to display technologies for flat-panel TVs, smartphones, etc. It licenses its technology to manufacturers of these products.At the time, digital displays were transitioning from LED to OLED; Universal Display was the industry leader. Therefore, it was a no-brainer. As companies such as Apple (NASDAQ:AAPL) moved to make their own displays, investors started to get nervous about growth. * 7 Industrial Stocks to Buy for a Strong New Year However, if the company's latest quarterly report is any indication, OLED's got plenty of gas left in the tank in 2020 and beyond. Generac Holdings (GNRC)Source: Lissandra Melo / Shutterstock.com In 2019, Generac Holdings (NYSE:GNC) delivered a total return of 102%, with almost one-third of the gains coming in the final three months of the year.The tail end of Hurricane Dorian hit Halifax, Nova Scotia, where I live, in September -- knocking out power for most of the province. Ever since then, I've paid close attention to Generac's TV advertisements promoting its residential generators.Although you could hardly mistake Generac for Roku or Shopify, it still managed to deliver record-breaking net sales and adjusted EBITDA in the third quarter. Residential sales jumped 7.4% on higher demand for the company's residential units.As North America's electrical grid ages, the number of power outages increases. Clearly, I'm not the only person noticing Generac's products on TV. And, as a result, Generac's raised its sales growth for the entire fiscal year.Generac doesn't pay a dividend. However, if its residential unit in the U.S. continues to grow in the high single digits, there will be more than enough capital appreciation to keep shareholders happy. Yeti Holdings (YETI)Source: David Tonelson / Shutterstock.com Yeti Holdings (NYSE:YETI) is your typical rags to riches entrepreneurial story.Brothers Roy and Ryan Seiders founded the company in 2006 in Austin, Texas. The two outdoorsmen were frustrated with the quality of hard coolers on the market. By utilizing advanced manufacturing techniques and forward-thinking design, the duo came up with the Yeti cooler, an indestructible product that put other coolers to shame. From there, the brothers moved on to other outdoor products, and the rest, as they say, is history.In 2012, the brothers agreed to sell 70% of the company to New York City-based private equity firm, Cortec, for $67 million. When Yeti went public in October 2018 at $18 per share, some stories circulated at the time that suggested Cortec could reap as much as $3.3 billion from the IPO.I've looked all through its IPO documents and fail to see that much largesse.Nonetheless, all of the stakeholders, including the Seiders brothers, have benefitted greatly over the past seven years. And those that bought in IPO shares and are still holding gained 134% in 2019 alone.In October, I recommended YETI stock because the company's direct-to-consumer business is growing by leaps and bounds. * 5 Stocks to Consider for the New Year Private equity firms often are bad news for consumer brands. In the case of Cortec, that wasn't the case. In 2020, expect Yeti to maintain its growth trajectory. Cannae Holdings (CNNE)Source: Shutterstock Cannae Holdings (NYSE:CNNE) generated a 2019 return of 117%.Who is Cannae Holdings?It is the not-so-new name for Fidelity National Financial Ventures, the non-real estate investment vehicle of Fidelity National Financial (NYSE:FNF) -- one of the biggest providers of title insurance in the U.S.What does Cannae own today?Its most significant investment is in Ceridian HCM Holdings (NYSE:CDAY), a human capital management company run by Canadian CEO David Ossip. I first recommended CDAY stock in May 2018, calling it "one of the best up-an-coming stocks to own on the NYSE." CDAY is up 105% in the 20 months since. Cannae recently sold 9 million shares at nearly $57 each. It still owns 28.7 million shares or 20% of the company.In February 2019, in conjunction with other investors, Cannae acquired Dun & Bradstreet for $6.5 billion, including the assumption of $1.1 billion in debt. In the take-private acquisition, Cannae invested $506 million in return for 24.5% of D&B's outstanding equity. In addition to these two extensive holdings, it also has a few smaller investments -- including a controlling stake in the O'Charley's, Village Inn and Ninety Nine Restaurants & Pubs.Chairman Bill Foley II is known to be one of the better capital allocators in America.At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Dividend Stocks to Buy to Kick Off the New Year * 7 Buyout Targets to Watch For 2020 * 9 Boring Stocks to Buy You Should Never Let Go Of The post 7 Stocks to Buy That Could Double for a Second-Consecutive Year appeared first on InvestorPlace.
Among the newer generation of internet marketplace stocks, Etsy (NASDAQ:ETSY) is one of the more mature names. The company went public almost five years ago and was in business for a decade prior to that.Source: quietbits / Shutterstock.com Despite its tenure, Etsy has fallen behind marketplace rivals such as Shopify (NYSE:SHOP) and share price performance reflects as much. Amid expectations of slowing growth, Etsy stock stumbled to a 7% loss in 2019 while the S&P 500 and other broader benchmarks surged. Shopify more than tripled.Etsy's 2019 performance is disappointing when considering the strength of the U.S. consumer and economy. The company matches buyers and sellers in areas like clothing, jewelry and vintage items. And it collects a fee on those transactions.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe stock even tumbled following a solid third-quarter earnings report, in which the company revealed sales growth of 30% and raised gross merchandise sales (GMS) and revenue guidance. Typically, upbeat guidance should be rewarded by investors. But that wasn't the case for Etsy stock. The negative reaction puts pressure on the fourth-quarter earnings update and 2020 guidance to be spectacular."During the third quarter we launched several transformative initiatives to serve as the building blocks for long-term, sustainable growth," Etsy CEO Josh Silverman said in a statement. "… We are just beginning to see the impact of these initiatives, which we believe further our competitive advantages and will have a more meaningful contribution to our results in 2020 and beyond." Headwinds and OpportunityPerhaps the two biggest hurdles Etsy faces in 2020 are convincing investors last year's GMS and sales growth is somewhat sustainable and prompting market participants to pay up for that growth. That's another way of saying that almost 46 times this year's earnings and 7 times sales, Etsy isn't inexpensive. * 9 Boring Stocks to Buy You Should Never Let Go Of The good news for Etsy is that many of its customers are constantly shopping. Plus, the housing market is strong. The iShares U.S. Home Construction ETF (BATS:ITB) jumped almost 49% last year. And millennials -- a core Etsy demographic -- are entering the home-buying arena in force. The online marketplace operator stands to benefit.While Etsy stock has its critics on Wall Street, it has supporters, too, including RBC Capital analyst Mark Maheny.Maheny likes the 2020 outlook "for the stock given a large, loyal, and growing community of buyers and sellers and multiple growth initiatives, including free shipping, advertising, and product improvements," reports Barron's.The average analyst price target on Etsy is just over $65, but the stock closed barely under $45 on Friday. So something has to give. Either analysts lower their price forecast or the stock starts marching closer to the current consensus target. Bottom Line: Etsy Stock Is UnderappreciatedEtsy isn't as big as some of the aforementioned names and doesn't have the sizzle markets have ascribed to Shopify. But the Brooklyn-based company does have some important factors in its favor. Notably, this isn't some ultra-expensive, nowhere-close-to-profitable internet unicorn.Etsy was actually cash flow positive in the third quarter and ended that period with $856.7 million in cash or cash equivalents. Plus, the company is buying back its own stock, something that mature, financially sound companies do.After repurchasing $2.8 million of its own shares, Etsy may want to consider buying more of its stock before it rallies too much. Another repurchase would serve as an avenue for boosting earnings. Investors may want to follow suit.As of this writing, Todd Shriber did not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Dividend Stocks to Buy to Kick Off the New Year * 7 Buyout Targets to Watch For 2020 * 9 Boring Stocks to Buy You Should Never Let Go Of The post Despite Narrow Marketplace Focus, Etsy Stock Has Crafty Potential appeared first on InvestorPlace.
The SPDR S TR/S&P INTERNET ETF (NYSE: XWEB ) has gained about 9% year-to-date, underperforming the Nasdaq Composite Index, which has soared about 34% in the same period. Given the catching up the subsector ...
On the heels of a rough 2018 wherein the company's data-privacy practices were widely scrutinized and its core business model was threatened, social media giant Facebook (NASDAQ:FB) has staged a huge rebound in 2019.Source: Ink Drop / Shutterstock.com Year-to-date, Facebook stock is up an impressive 60% as those aforementioned data-privacy criticisms have largely faded, while the company's core business has regained lost momentum. These big gains for Facebook stock will continue in 2020. * 6 Transportation Stocks That Are Going Places Specifically, I think there are four big growth catalysts which will push Facebook stock about 40% higher in 2020, to an all-time high price tag of $275.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWhat are those four big catalysts? Let's take a deep dive into each one of them. Catalyst 1: Digital Ad Business Sustains Big MomentumThe first catalyst that will help Facebook stock hit $275 in 2020 is sustained healthy momentum in the company's core digital ad business. There are a few underlying drivers here.First, digital ad market conditions will improve in 2020, as easing geopolitical tensions spark a rebound in corporate capital spending plans, of which digital advertising is a sizable chunk. Second, the core Facebook and Instagram properties will win more ad dollar share as management more deeply and optimally integrates ads into Facebook and Instagram Stories. Third, the Messenger and WhatsApp communication platforms will start to roll out ads through their feeds and stories, and new ad revenue from these platforms will push the company's overall revenue growth trajectory higher.Facebook's core digital ad business will go from slowing in 2018 and 2019, to stabilizing in 2020. Digital ad growth stabilization will provide a boost to near-term investor sentiment, while improving the company's long-term growth prospects. Catalyst 2: E-Commerce Initiatives Gain Notable TractionThe second big catalyst for Facebook stock in 2020 relates to the company's big e-commerce push. Specifically, through various initiatives like Facebook Pay and Instagram Shopping, Facebook is trying to make a big push into the e-commerce game. Such initiatives have yet to gain notable traction.That will change next year. Because of big growth in influencer culture, there has been a steady rise in consumer proclivity to shop through social channels. At the same time, Facebook is just now partnering with Shopify (NYSE:SHOP) and rolling out native payment options to seamlessly turn this increased proclivity into consumer action.All of these trends will converge in 2020. This will cause Facebook's e-commerce initiatives to finally gain notable traction. As they do, investors will grow more optimistic about the long-term potential of Facebook's e-commerce business. This optimism boost will provide support for further gains in Facebook stock. Catalyst 3: Analysts Hike Forward Profit EstimatesThe third big catalyst for Facebook stock in 2020 will come from Wall Street analysts.After Facebook reports one or two strong quarters in 2020 with digital ad growth stabilization and an impressive e-commerce ramp, sell-side analysts will grow increasingly bullish on the company's medium- to long-term profit growth prospects. They will increase forward profit estimates, reiterate "buy" ratings on the stock, and hike their price targets.All of this favorable sell-side activity will provide Facebook stock with even more firepower to head higher over the next twelve months. Catalyst 4: Facebook Stock's Multiple ExpandsThe fourth big catalyst for Facebook stock in 2020 is underlying multiple expansion, from increasingly positive investor sentiment and low interest rates.Facebook stock presently trades at 24-times forward earnings. That's a pretty cheap multiple for a company that projects to grow revenues and profits by 20%-plus for the next several years. This discounted valuation is a byproduct of investor concerns with respect to the sustainability of big growth in the company's digital ad business. In 2020, those sustainability concerns will fade as the digital ad business stabilizes, which should spark expansion in the stock's earnings multiple.At the same time, interest rates will likely remain lower for longer. In that environment, growth stocks with improving sentiments should generally benefit from multiple expansion, as low interest rates provide support for extended growth valuations. Bottom Line on FB StockThanks to stabilizing trends in its digital ad business, improving trends in its e-commerce business, bullish sell-side analyst activity, and a favorable valuation backdrop, Facebook stock should repeat on its 2019 successes in 2020.The numbers here imply that $275 is doable for Facebook stock by the end of next year. Fiscal 2021 earnings per share estimates presently sit just shy of $11. When all is said and done -- after Facebook reports big growth quarter after big growth quarter in 2020 -- fiscal 2021 EPS estimates will likely be north of $11.At the same time, Facebook's forward earnings multiple might climb back up to more historically normal levels of around 25. That combination of a 25-times forward earnings multiple and $11 in 2021 EPS implies a 2020 price target for Facebook stock of $275.Thus, I don't think the big winning in Facebook stock is over. On the contrary, it may just be getting started.As of this writing, Luke Lango was long FB and SHOP. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 6 Transportation Stocks That Are Going Places * 5 Bold Stock Market Predictions for 2020 * 3 Beer Stocks to Own Heading Into New Year 2020 The post The 4 Catalysts That Will Push Facebook Stock Above $250 in 2020 appeared first on InvestorPlace.
Dow Jones futures: As the stock market rally heads into 2020, five of 2019's biggest winners are near new buy points: Shopify, Coupa Software, Crispr Therapeutics, Inphi, SolarEdge.
(Bloomberg) -- With two trading days left until the end of the year, Canada’s benchmark stock index is on pace for its best run in a decade.After hitting 59 fresh highs, the S&P/TSX Composite Index has climbed about 20% this year, weathering everything investors could throw at the market: volatile commodity prices; the unpredictability of U.S.-China trade tensions; Canada’s fractious federal election; heightened recession fears and persistent profit concerns.Here’s a look at some of the biggest winners and losers in Canada’s equity market this year.Investor DarlingReal Matters Inc., a provider of network services for the mortgage and insurance industries, is the biggest gainer so far this year with a 282% surge. The rally has pushed the Markham, Ontario-based company’s market value beyond the C$1 billion ($819 million) mark. Last month, National Bank Financial upgraded the stock to outperform and said it “did not give enough respect to the correlation of Real Matters business with the market volumes for mortgages.”The rotation from value to growth this year has been good for tech stocks, making them the country’s best performing group by a mile. The S&P/TSX Info Tech Index has gained more than 65% this year, adding about C$58 billion ($45 billion) in value.Shopify Inc., the subject of some takeover speculation, is up 183% so far in 2019, the top tech stock and the second-best overall performer on the broader index. Investors have rewarded the Ottawa-based company’s rapid sales growth and its plans to spend $1 billion to set up a network of fulfillment centers in the U.S. In October, Shopify reported an unexpected quarterly loss which may have tempered sentiment. Co-founder and chief executive officer Tobi Lutke took to Twitter on Boxing Day to share his thoughts on his company’s success:The tech gauge makes up about 6% of the TSX Index but only contains 10 stocks, leading tech-starved investors to turn to newly-listed Lightspeed POS Inc., which boasted Canada’s second-biggest IPO this year and the biggest offering by a Canadian tech firm in almost nine years. The stock has gained 93% this year, making it the second best tech stock on the TSX.The PariahThe investor frenzy that characterized the cannabis industry in 2018 quickly faded this year as companies missed earnings expectations and the regulatory landscape proved to be more difficult than expected. Canada’s healthcare index, primarily made up of marijuana companies, is the worst performer this year, and the only one in the red.Aurora Cannabis Inc., the biggest loser on the TSX, has wiped out C$4 billion in market value in 2019 as it tempered plans to achieve sustained earnings before interest, taxes, depreciation and amortization in the quarter ended June 30. The Edmonton, Alberta-based firm reported an adjusted Ebitda loss of C$39.7 million for the quarter ended Sept. 30.Gatineau, Quebec-based Hexo Corp. came in a close second, erasing about half its value this year. The company cut almost a quarter of its workforce weeks after saying it wouldn’t meet revenue guidance this year or next. Last week, beleaguered Hexo announced a share shale at a “massive” discount that sent the stock tumbling yet again.Pot exchange-traded funds in the U.S and Canada have also suffered: ETFMG Alternative Harvest ETF has slumped 57% since its March peak and the Horizons Marijuana Life Sciences ETF has plunged more than 63%:Also RansSo what’s left? Here’s a look at some of the other main moves this year:Ballard Power Systems Inc. jumped 177% so far this year as it announced a technology breakthrough that replaces most of the high-cost platinum used in earlier designSNC-Lavalin Group Inc. has slumped about 34% despite staging a late comeback as it settled a fraud charge related to bribes paid in Libya a decade ago.Miners have climbed more than 20% in 2019 as the price of gold and silver rose. Canadian energy stocks eked out a 22% gain this year, quietly outperforming their U.S. counterparts as a chorus of positive outlooks on the sector to the north continues.Markets -- Just The NumbersChart of The WeekEconomyCanada’s economy contracted in October for the first time in eight months, missing economist estimates for a flat reading, as the United Auto Workers strike in the U.S. weighed on plant production.Fewer Canadian small and mid-size firms intend to make capital expenditures in the next three months, according to a monthly industry survey by the Canadian Federation of Independent Business.Next up, Markit Canada manufacturing PMI for December is due on Jan. 2.TrendingInCanadaAfter Canadian broadcaster CBC cut out Donald Trump’s cameo in “Home Alone 2: Lost in New York,” the U.S. President took to Twitter, suggesting Canadian Prime Minister Justin Trudeau may have had something to do with it. CBC said on Friday the edits to the film were made in 2014, before Trump became president, to add for more commercial time.Click here for our daily Social Media Buzz newsletter.To contact the reporter on this story: Divya Balji in Toronto at email@example.comTo contact the editors responsible for this story: Kyung Bok Cho at firstname.lastname@example.org, Chris Fournier, Carlos CaminadaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
We are now at the end of 2019, and what a year it has been for the stock market. A year ago, stocks could do no right. They were going through their biggest correction since 2008 amid escalating concerns that a recession was just around the corner. That recession never happened. Instead, throughout 2019, the global economic outlook has only improved.Now, at the end of 2019, stocks can do no wrong. The S&P 500 is up nearly 30% year-to-date and presently sits at record highs.Who called it? I don't mean to brag, but yours truly. In my 10 predictions for the stock market in 2019, my first prediction was that the S&P 500 was going to have its best year this decade. Up nearly 30% year-to-date, the S&P 500 is already having its second best year of the decade, and with just a few more up days, it could end 2019 with its best annual performance since 1997.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAlso in those 10 predictions for 2019, I nailed Disney's (NYSE:DIS) big breakout year (up more than 30% year-to-date), Tesla's (NASDAQ:TSLA) big breakout year (up nearly 30% year-to-date) and huge outperformances from Shopify (NYSE:SHOP), The Trade Desk (NASDAQ:TTD), Adobe (NASDAQ:ADBE), Roku (NASDAQ:ROKU) and Square (NYSE:SQ), among which the average year-to-date gain is over 150%.Now, it's time to unveil my bold predictions for 2020. Will the market have another breakout year? Or will stocks falter after a big 2019? Which stocks will do particularly well? Which stocks won't perform up to par? * 7 Stocks to Buy to Get 2020 Started the Right Way Let's answer those questions, and more, by taking a deep dive into my five boldest predictions for the stock market in 2020. Stock Market Predictions: Stocks Fall FlatSource: Shutterstock Why It Could Happen: I was very optimistic on stocks in late 2018 because awful was priced in, but awful was not the reality. At the end of 2019, though, we have a very different situation. Great is priced in. While great may be the reality today, it may not be the reality throughout the next 12 months.I do believe that U.S.-China trade tensions will continue to ease into the 2020 presidential election, and that those easing trade tensions will provide a meaningful lift to the global economy. But, I also believe that at 17.6-times forward earnings (versus a five-year average multiple of 16.6), a lot of that "lift" is already priced into the S&P 500. It's also worth noting that investors have entirely forgotten about the inverted yield curve. History says that the big pullback in stocks usually doesn't happen until 12-18 months after an inversion. That timeline puts us squarely in the middle of 2020.Why It Might Not Happen: The global economy will improve in 2020 thanks to easing global trade tensions. As it does, corporate leaders will become more confident. They will pour more money into the economy, which will provide more fuel for growth. Against this favorable backdrop, companies across the globe will report far better-than-expected earnings, management teams will lift their guides and analysts will keep pushing up their forward earnings estimates. Given all those favorable tailwinds, valuation might not matter in 2020. Stocks could keep pushing higher behind robust profit growth, with higher forward estimates being a justification for today's premium valuation. Ride-Hailing Stocks Bounce BackSource: Daniel Dror / Shutterstock.com Why It Could Happen: Ride-hailing giants Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) had awful initial public offerings in 2019. Since then, both stocks have been duds on Wall Street for various reasons, ranging from slowing growth, to extended valuations, to legislative and C-suite noise. In 2020, though, those headwinds should reverse course.At both Uber and Lyft, growth has already slowed meaningfully, with recent quarterly trends implying that this deceleration is moderating and that growth rates could stabilize in 2020. International expansion at Uber and new product launches at Lyft will also help stabilize growth. At the same time, both Uber and Lyft are trading at a fraction of their IPO valuations, so expectations are significantly depressed. Legislative and C-suite noise should also ease. As stabilizing growth trends converge on depressed valuations without any optical noise, ride-hailing stocks could bounce back in a big way in 2020. * 7 Vaping Stocks to Get into Ahead of the Crowd Why It Might Not Happen: UBER and LYFT stock may remain weak in 2020 if their growth trends continue to decelerate and losses continue to widen. This is unlikely. But, there is a chance that ride-hailing tailwinds continue to ease in 2020. The easing of these tailwinds could force even more promotional behavior from Uber and Lyft, the sum of which will result in weaker margins and bigger losses. If that does happen, neither of these stocks will rebound. Cannabis Stocks Will ReboundSource: Shutterstock Why It Could Happen: Pot stocks were killed in 2019. That's thanks to demand headwinds in the Canadian market, margin pressures from black market competition and snail-like progress on the U.S. legislation front. All of those headwinds converged on extended pot stock valuations, and caused companies like Canopy Growth (NYSE:CGC), Aurora (NYSE:ACB) and Cronos (NASDAQ:CRON) to shed more than half of their value.In 2020, the exact opposite could happen. Demand headwinds could turn into tailwinds with the launch of cannabis 2.0 products (edibles and vapes). Margin pressures from black market competition will ease as legal supply and logistics improve. And, U.S. legislation could make meaningful progress as the House just passed the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act. All of those positive developments could converge on what are now discounted valuations in the cannabis category and spark a big rebound rally in pot stocks.Why It Might Not Happen: The 2020 pot stock rebound thesis is entirely predicated on three things: revenue trend improvements, margin trend improvements and U.S. legislation progress. But, revenue trends may not improve if cannabis 2.0 products aren't a hit. Margin trends may not improve if legal supply and logistics improvements aren't sufficient to compete with the black market. And, U.S. cannabis legislation may not make much progress in a Republican-controlled Senate. If those three things don't happen, then pot stocks won't rebound. Nio Stock TriplesSource: Sundry Photography / Shutterstock.com Why It Could Happen: Chinese premium electric vehicle maker Nio (NYSE:NIO) is one of my favorite high-risk, high-reward picks going into 2020 for a few reasons. First, the stock was massively beaten up in 2019, and is well positioned to soar higher on any good news. Second, China's economy will rebound in 2020 after slowing for most of 2018 and 2019, thanks to easing U.S.-China trade tensions. Third, as China's economy rebounds, China's auto market will rebound, too. Fourth, China's EV market will rebound in an even bigger way, because legislation in China remains supportive of EV adoption. Fifth, NIO's sales trends are improving heading into 2020. Sixth, NIO is launching a new car next year, so today's improving sales trends should persist into 2020.Putting all that together, I think NIO stock has a reasonably good chance to more than triple in 2020. * The 10 Worst Dividend Stocks of the Decade Why It Might Not Happen: The rebound thesis in NIO stock is entirely predicated on improving U.S.-China trade relations providing a spark for China's economy and auto sector. If that doesn't happen -- and it might not, considering how volatile trade relations have been over the past year -- then NIO stock won't rebound, because investor sentiment will remain depressed and sales trends won't accelerate in the way they need to in order to support a multi-bag rally in NIO stock. Beaten-Up IPO Stocks Stage a ComebackSource: Shutterstock Why It Could Happen: Many high-flying IPO stocks hit a brick wall in mid-2019 and have since dropped off a cliff. See Beyond Meat (NASDAQ:BYND), Chewy (NYSE:CHWY), Slack (NYSE:WORK), Pinterest (NYSE:PINS) and Zoom Video (NASDAQ:ZM), among many others. I think most of those stocks will bounce back in 2020.These stocks were inarguably over-hyped following blockbuster IPOs. A few downward catalysts later, and they are all under-hyped. But, these are still great companies, pioneering change across big and valuable industries. Because of this, under-hype won't stick around for long. These beaten up IPO stocks will bounce back in 2020, behind sustained robust growth. Of note, I particularly like Beyond Meat and Pinterest as potentially 100%-plus upside candidates for 2020.Why It Might Not Happen: The batch of 2019 IPO stocks may remain weak in 2020 if: 1) interest rates move materially higher and create bigger valuation pressure on growth stock valuations, 2) broader stock market sentiment turns cautious amid choppy U.S.-China trade relations, and/or 3) these companies fail to make progress on the profitability front (pretty much all of them run losses today). As such, while IPO stocks look good for a big rebound in 2020, there are also multiple risks to that rebound thesis.As of this writing, Luke Lango was long TSLA, SHOP, TTD, ADBE, ROKU, SQ, LYFT, CGC, NIO, BYND, CHWY and PINS. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy to Get 2020 Started the Right Way * 10 Best ETFs for 2020: The Competition Is Stacked Full of Potential * 4 Gold Stocks to Buy as the Yellow Metal Surges The post 5 Bold Stock Market Predictions for 2020 appeared first on InvestorPlace.
Stock futures: Amazon leapt Thursday, leading the stock market. Amazon earnings growth is expected to accelerate in 2020. So are EPS gains for FANG stocks Facebook, Google and Netflix.