|Bid||0.00 x 800|
|Ask||0.00 x 800|
|Day's Range||351.46 - 361.07|
|52 Week Range||117.64 - 372.36|
|Beta (3Y Monthly)||1.33|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Two years ago, Chris Wane, a now 31-year-old living in Manchester, England, was struggling to pay his bills and often couldn’t afford enough food for the week. Wane started an e-commerce business and used drop shipping — a practice in which a retailer keeps no inventory and a third-party supplier sends consumers the products — to handle orders. “I heard about drop-shipping a couple of years ago, and I wanted to try it,” Wane said.
(Bloomberg) -- Shopify Inc.’s scorching rally and Lightspeed POS Inc.’s successful trading debut this year are throwing the spotlight on who might be the next Canadian tech star to go public.A total of C$1 billion ($751 million) was invested in 142 venture capital deals in the first quarter, up 48% from a year earlier, according to the Canadian Venture & Private Equity Association. More than half of that was in tech and increasingly from U.S. investors.Here’s what the founders of some of Canada’s hottest tech firms are saying about the future of their companies, and the potential for initial public offerings:ClearbancClearbanc offers $10,000 to $10 million to startups to help fund their marketing campaigns on Facebook, Google and the like in return for a flat fee and a share of revenue.The Toronto-based investment firm, founded in 2015, raised $300 million in new funding led by Highland Capital Partners of the U.S., the largest disclosed VC-financing this year in Canada. That brings total funding to $420 million.Clearbanc plans to offer $1 billion in financing this year and is interested in funding parts of a business that could turn into a repeatable revenue stream--infrastructure, shipping and sales commissions.It’s expanding outside the U.S. and Canada, where there’s a less developed venture ecosystem and “banks are more conservative,” according to co-founder and chief executive officer, Andrew D’Souza.“We think that the fundamentals of the business, the market opportunity, justifies a large standalone business,” D’Souza said about the possibility of an IPO.WattpadWattpad Corp. may no longer be a startup but its ambitions just keep growing. Founded as a mobile-reading app, 12-year-old Wattpad now calls itself a “multi-platform entertainment company.”The Toronto-based company has provided content for one of the most re-watched movies on Netflix (“The Kissing Booth”), a Hulu series (“Light as a Feather”), and this year a Hollywood feature film (“After”), all through Wattpad Studios, launched in 2016.Last week it inked a deal with Penguin Random House in the U.K. to turn its online content, mainly created and read by young women, into books. That follows the launch of its own publishing imprint, Wattpad Books, in the U.S. in April.The company uses data from more than 80 million monthly active users to identify the best stories across its platform and turn them into content. It has launched a paid, ad-free version as well as exclusive content for a fee.Wattpad has raised $117.8 million from investors including OMERS Ventures, Tencent Holdings Ltd.’s capital arm, and August Capital Corp, and is generating revenue in “eight figures,” according to co-founder and chief executive, Allen Lau.As for an IPO, it’s “not what we spend time focusing on,” Lau said. “Our focus right now is on movies and TV shows, with our partners.”VidyardVidyard Inc. wants to be the YouTube of business videos. Its software allows companies to create personalized videos to engage with customers and use data from their viewing habits to analyze that engagement.Companies are expected to spend $103 billion annually in video-ad marketing by 2023, according to Forrester Research.Vidyard counts 1,200 businesses in over 170 countries as its customers, including enterprise customers such as Honeywell International Inc., LinkedIn and Citibank.“In terms of the next two to three years, we’re just focused on consistent, hockey-stick style growth,” says Devon Galloway, co-founder and chief technology officer at Kitchener, Ontario-based Vidyard.The company has raised $60 million to date from investors including OMERS Ventures, Inovia Capital and the venture capital arm of Salesforce Inc.Galloway said if Vidyard continues to grow as well as it has an IPO would certainly be on its path.WealthsimpleWealthsimple Inc., wishes to replace banks as a customer’s primary financial relationship, according to founder and CEO Michael Katchen.“We want to be a firm that demystifies money,” Katchen said in an interview in Bloomberg’s Toronto office. The investment-services company has more than C$5 billion in assets under management and 175,000 customers in Canada, the U.S. and U.K.The robo-adviser favored by millennials, is also targeting wealthier Canadians and has branched out into commission-free stock trading and savings products. Mortgages, life insurance and checking accounts could be next, Katchen said.Founded in 2014, WealthSimple is not yet profitable, but its backers are patient, Katchen said. These include Power Financial Corp., an investment arm run by the Desmarais family and Allianz SE.Katchen said he’s interested in an IPO but it’s still “a few years away.”(Updates with Clearbanc’s financing plan)To contact the reporter on this story: Simran Jagdev in Toronto at firstname.lastname@example.orgTo contact the editors responsible for this story: Jacqueline Thorpe at email@example.com;David Scanlan at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- When Swedish banking firm Klarna became Europe’s most valuable financial technology startup last week, it was only the latest sign that digital finance has escaped the troubles afflicting legacy lenders.Its latest fundraising gave Klarna, which facilitates online installment payments, a $5.5 billion valuation. European fintech companies raised $3.3 billion in venture capital in the first half of 2019, up from $1.9 billion in the same period last year, according to data compiled by CB Insights. In contrast, an index of European Union banks has dropped 39% the past 18 months.“Investors are drawn to it because it’s the perfect blend of a huge, mature industry which, empowered by technology, can deliver vast returns, far in excess of what you see if you’re starting up out of nowhere,” said Ben Brabyn, chief executive officer of Level39, one of Europe’s largest fintech accelerators, in an interview.Here are a few other recent industry highlights and what to watch out for next.Fintechs Flout Brexit WorriesLondon fintechs defied the Brexit gloom that descended on the the U.K. Transferwise Ltd. announced a funding round in May that valued the eight-year-old company at $3.5 billion, up from $1.6 billion in 2017. A few weeks later, online bank Monzo closed a new funding round doubling the startup’s valuation to more than $2.5 billion. Meantime, Revolut Ltd., while being eyed by regulators for possible compliance lapses, expanded into stock trading. They weren’t all winners: shares of peer-to-peer lender Funding Circle Ltd. have plunged 65% this year.IZettle’s Surprise PayPal SaleIt was the midnight deal that surprised many -- PayPal Holdings Inc. purchased iZettle AB for $2.2 billion in May 2018 the night before the Swedish startup had planned to price its shares in an initial public offering. Stockholm-based iZettle competes with Twitter co-founder Jack Dorsey’s Square Inc., and Canada’s Shopify Inc.Adyen Soars After IPODutch payments processor Adyen NV hit headlines for two reasons last year. First, in February, it was announced the Netherlands-based firm would replace PayPal as EBay Inc.’s global checkout service. Then in June, it held a billion-dollar IPO and saw its shares surge 90% in the first day of trading. The company, whose clients include Netflix Inc. and Spotify Technology SA, is now valued at 20 billion euros ($22.4 billion)Worldpay’s $35.5 Billion DealAs one of the world’s biggest payments firms, Worldpay Inc. handles about $1 trillion annually -- similar to Chase Paymentech. When Fidelity National Information Services Inc. said on July 31 it’d completed its $35.5 billion acquisition of the company, data compiled by Bloomberg showed the combined business will be the world’s biggest in the processing and payments industry. It wasn’t a bad day for Ohio-based Worldpay, which less than two years earlier had been a British enterprise snapped up for 7.7 billion pounds ($9.3 billion) by U.S. merchant acquirer Vantiv.What’s Next?N26, the German mobile bank backed by billionaire Peter Thiel, announced in July it had extended its most recent fundraising round to $470 million, at a valuation of $3.5 billion. The company is expanding from Europe to the U.S., betting it can attract users from established lenders and credit card providers with free accounts, fewer fees and phone alerts.Other companies to watch include Revolut, which despite multiple run-ins with controversy remains exciting to investors after it held one of the biggest fundraising rounds for a European fintech last year, and app-based banks Monzo and Starling, which are attracting customers at a rapid clip.Further down the line is the U.K.’s online lender Zopa Ltd., which its CEO Jaidev Janardana said in July could potentially hold an IPO in 2021.“The valuations are encouraging but they’re not enough. They’re just an early indicator. The important numbers to watch are the customers,” said Brabyn. “We all need to step up to demonstrate the public value of what we do.”To contact the reporter on this story: Ali Ingersoll in London at email@example.comTo contact the editors responsible for this story: Giles Turner at firstname.lastname@example.org, Nate Lanxon, James HertlingFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The gains in Shopify (NYSE:SHOP) stock continue. SHOP stock now has risen 176% in 2019 alone. It has more than tripled from December lows.Source: Shutterstock Shopify stock has had a truly staggering run. The company has added nearly $25 billion in market value in seven and a half months. And all the while, observers -- myself included -- have argued that SHOP stock is a bubble, or at the very least significantly overvalued.Yet Shopify stock marches higher regardless, climbing the proverbial "wall of worry." And as I have written of late, the stock could keep going. Fulfillment plans offer another reason for bulls to see even greater profits down the line. More broadly, investors have shown a willingness to pay up for growth.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Safe Dividend Stocks for Investors to Buy Right Now I still believe Shopify is overvalued. I called it out last month as one of 10 stocks set to crash at some point. The question after another blowout earnings report is when that point might come -- and what will be the catalyst. Could a Market Decline Hit SHOP Stock?The most obvious catalyst would seem to be a broad market decline. After all, when markets struggled in the fourth quarter of 2018, SHOP stock did as well.That said, SHOP didn't perform that badly. It declined 16% in the fourth quarter. But the NASDAQ Composite fell 18%. Square (NYSE:SQ), another high-growth, high-priced, small business play, dropped 43% over the same period. And some of the pressure on Shopify stock came from a secondary offering which the company priced at $154.Meanwhile, markets have seen some pressure at times this year, yet SHOP has been largely immune. Its only real weakness in 2019 came in June, after Roth Capital and Wedbush downgraded the stock on back-to-back days. (Those firms, too, cited valuation concerns.) There have been enough periods of market volatility this year to rattle Shopify stock again. So far, they've had little, if any, impact. SHOP Stock's Rising CompetitionAnother potential point of pressure could be on that competitive front. Square is looking to challenge Shopify as it integrates its 2018 acquisition of Weebly. Facebook (NASDAQ:FB) unit Instagram has launched In-App Checkout, which allows brands to sell products directly through that platform. And of course, Amazon (NASDAQ:AMZN) offers small businesses enormous reach as well.But it's tough to see anyone taking down Shopify any time soon. Going forward, the nature of digital platforms is that it gets harder for competitors to gain as those platforms grow and network effects take hold.And it's not as if anyone can simply enter the market and succeed. As Barron's reminded readers last month, eBay (NASDAQ:EBAY) acquired GSI Commerce for $2.4 billion in 2011 in an effort to capture the same market as a then-nascent Shopify. eBay sold the business for $925 million four years later, and it was split up by the new owners in 2016.Shopify's growth may slow; in fact, it almost certainly will given its exponentially increasing reach. At least at the moment, it's hard to see rivals gaining much, if any, market share. The Cycle TurnsI still believe there's one key risk here that investors haven't properly discounted: the macroeconomic cycle. Small businesses are notoriously at risk when a recession hits.Obviously, investors aren't terribly worried about this fact right now. Cyclical stocks on the whole are trading at low multiples -- yet SHOP stock keeps gaining. As cyclical fears have rattled U.S. stocks at points this year, SHOP has been unaffected.This is a company that still gets over 40% of revenue from subscriptions rather than its take rate on the sale of goods. The number of customers matters. And if the businesses paying for those subscriptions fail -- whether because the economy turns or because more entrepreneurs exist than perhaps should at the moment -- Shopify's growth will slow dramatically. What Can Stop Shopify Stock?These risks are real -- but, honestly, they don't look all that likely right now. At the very least, they're unlikely to change the narrative surrounding Shopify stock any time soon.So what does? Maybe nothing. SHOP stock is expensive, but it has been expensive for all of 2019. Investors keep buying it. That may stop at some point -- but I'd hardly be willing to bet against SHOP stock in the meantime.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Real Estate Investments to Ride Out the Current Storm * 7 Marijuana Penny Stocks to Consider for Those Who Can Handle Risk * 7 Safe Dividend Stocks for Investors to Buy Right Now The post What Stops the Gains in SHOP Stock? appeared first on InvestorPlace.
Markets are choppy right now. Although there are a lot of risks out there, none of them are truly that big … yet. Investors are getting more concerned by the day, and that's why some growth stocks have taken a step back in August.It's also why volatility is up.But, zooming out, the biggest investment implication of this volatility is as follows: buy the dip in growth stocks.InvestorPlace - Stock Market News, Stock Advice & Trading TipsStocks should broadly head higher for the foreseeable future. As investors grow more cautious on the global economy, they have piled into U.S. Treasuries. At the same time, the Federal Reserve is cutting rates. The result is that the 10-Year Treasury yield is at 1.7%. And the inflation rate is at 1.6%.Thus, real rates are essentially zero, so if investors want any real return, they have to turn to the stock market. Concurrently, America's consumer economy is doing just fine -- it's just the manufacturing sector that's getting hit hard. Most of the U.S. economy is consumer-driven, so overall growth should remain healthy for the foreseeable future. This dynamic of healthy growth and low rates should keep stocks on an uptrend.Further, low rates are great for growth stocks, since these stocks derive a majority of their value from future profits, and the value of those future profits goes up in a low-rate environment. * 10 Real Estate Investments to Ride Out the Current Storm What all that means is that now is the time to buy the dip in growth stocks. Let's take a look at 15 of my favorite growth stocks to buy now and hold for the long haul. Growth Stocks to Buy for the Long Haul: Facebook (FB)Source: Shutterstock The bull thesis here is pretty simple. Facebook (NASDAQ:FB) owns all of the digital properties which consumers of all ages are addicted to -- Facebook, Instagram, Messenger and WhatsApp. One of those properties is the town hall of the internet, and everyone is on it (Facebook). One of those properties is the hottest app among young consumers (Instagram). Two of those properties are must-have global communication tools (Messenger and WhatsApp).In other words, everyone is in the Facebook ecosystem, and no one is leaving anytime soon. Because no one will leave, advertisers will continue to flock into the ecosystem. Ad revenues will march higher. The company will push forward with great success in commerce, too. That will bring in more revenue. Margins will remain high. Profits will soar.And so will FB stock. Shopify (SHOP)Source: Shopify via FlickrYou buy Shopify (NYSE:SHOP) stock for the long haul because this company is rapidly revolutionizing the commerce world, and could one day become the backbone of a new form of global commerce.Long story short, the commerce world is pivoting into a direct decentralized model, wherein anyone can sell anything to anyone else through any channel. This pivot requires technology to connect buyers and sellers. Shopify makes that technology. In so doing, Shopify is becoming the backbone of this direct decentralized retail world -- the digital "store front" for all these merchants, if you will.This world will only grow over the next several years, as the retail world increasingly decentralizes alongside the rest of the global economy. As it does, Shopify will become an increasingly important player in the multi-trillion dollar global retail market. * 7 AI Stocks to Watch With Strong Long-Term Narratives As that happens, SHOP's revenues, profits and the stock will all run higher in the long term. Luckin Coffee (LK)Source: Shutterstock Luckin Coffee (NYSE:LK) is a relatively small but rapidly expanding coffee house operator in China, which focuses on technology integration to drive sales (you basically order the coffee online, and then go pick it up in the store). Over the next several years, this company will continue to expand its real estate footprint with great success, because their tech integration fits perfectly with modern consumption habits.As such, within the next five years, Luckin will turn into the Starbucks (NASDAQ:SBUX) of China. Starbucks has a $115 billion market cap. Luckin Coffee has a $5.5 billion market cap. That huge discrepancy means that Luckin Coffee still has a big runway ahead of it for future value creation.Long term, then, LK stock should move higher as this company transforms into the dominant player in China's very big retail coffee market. The Trade Desk (TTD)Source: Shutterstock The long-term bull thesis on The Trade Desk (NASDAQ:TTD) centers around the programmatic advertising revolution.Long story short, programmatic advertising is the future of advertising. Before, ad buying/selling was a clunky negotiation process conducted between multiple human parties. Today, the ad buying/selling process is being automated and optimized using data. This automated process is programmatic advertising. Thus, as automation and data-driven technologies become more commonly deployed, programmatic advertising will become the standard in the ad industry.The Trade Desk is one of -- if not the -- most important player in the programmatic advertising market. As this industry expands over the next several years, so will The Trade Desk. The upside potential is that the global ad market is marching toward $1 trillion. The Trade Desk has a market cap of just $12 billion. * 10 Medical Marijuana Stocks to Cure Your Portfolio Thus, in the long run, TTD stock will march significantly higher as programmatic advertising becomes the ad industry norm. Roku (ROKU)Source: Shutterstock Consumers across the world are pivoting in bulk from linear TV to streaming TV. In response, multiple media and content companies are also pivoting into the streaming TV space, and launching their own streaming services. The result is that the streaming TV world is getting really crowded -- with a ton of demand and a ton of supply.Someone needs to connect all that demand with all that supply. That's what Roku (NASDAQ:ROKU) does. Through its content-neutral streaming ecosystem, Roku is turning into the cable box of the streaming TV world, seamlessly connecting consumers to their favorite streaming services. As the cable box of the streaming TV world, Roku stands to make a ton of high-margin revenue through subscription sharing and video ad dollars at scale.Net net, in the long run, as the streaming TV space grows, Roku's revenues and profits will march significantly higher. That will ultimately power ROKU stock higher in the long run, too. Pinterest (PINS)Source: Shutterstock The digital ad growth narrative is far from over. Consumers pretty much spend all their time in the digital channel. Yet, in 2018, digital ad spend accounted for less than 50% of total ad spend in the U.S. The market is growing at 20%-plus clip, too. The implication? The ad market still has a lot of growth firepower and a long growth runway ahead of it.That's great news for Pinterest (NYSE:PINS). Pinterest is a freshly public visual discovery platform with 300 million users. That's a big user base. But, Pinterest is just now starting to monetize with ads. That ad business has been growing at a great pace. It will continue to do so because the digital ad market is a secular growth market, and because Pinterest has a unique ad value prop in that market (visual discovery lends itself very well to ads). * 7 Transportation ETFs That Are Ready to Rally Over the next several years, then, Pinterest will start to monetize its users at the same rate as other major social media platforms. That creates visible runway for Pinterest to go from an $18 billion company today, to a $30 billion-plus company one day -- the market cap for Twitter (NYSE:TWTR) today. Square (SQ)Source: Via SquareThe long-term bull thesis on Square (NYSE:SQ) is all about two things: the global cash-less revolution, and Square's innovation trajectory in the cash-less payments world.Consumers everywhere are ditching cash. Why? Because cash is easy to lose. It's bulky, and can take up a lot of space. Cash transactions tend to take longer. In other words, there's a laundry list of reasons why consumers are pivoting away from cash usage, and why a cash-less world is the future of commerce. Yet, cash still accounts for 27% of all consumer payments in the United States, meaning that this secular cash-less payments growth narrative still has a ton of runway for future growth over the next several years.That's great news for Square, which has created an ever-expanding ecosystem in the cash-less payments world. At first, it started with Square creating hardware, which helped merchants of all sizes process non-cash payments. Ever since, Square has expanded into banking with Square Capital, peer-to-peer e-payments with Square Cash, and enterprise management services with Square Payroll and Square Orders. In other words, over the past five-plus years, Square has innovated relentlessly to expand its reach in the secular growth cash-less payments world.This combination of secular growth market backdrop and relentless innovation is a winning combination. Ultimately, it will propel meaningful long-term revenue and profit growth, which should in turn power SQ stock higher in the long run. Okta (OKTA)Source: Shutterstock Hyper-growth cloud security company Okta (NASDAQ:OKTA) is a solid long-term investment for two big reasons. First, cybersecurity is an increasingly important field that will grow by leaps and bounds over the next several years. Second, Okta has developed a unique solution in the cybersecurity world, which paves the path for Okta to gain meaningful share in this secular growth market.On the first point, cybersecurity is everything these days, and it'll only become more important over the next few years. Enterprises are pivoting everything to the cloud -- their workflows, their documents, their data, so on and so forth. They are doing so because the cloud enables more seamless, efficient work. But, it also opens up all that important stuff to a plethora of cyber risks. As such, enterprises are investing big to protect themselves from all those cyber risks, and will continue to do so in greater frequency as more information and workloads pivot to the cloud.On the second point, Okta has developed a unique security solution -- centered on identity -- which allows individuals within an enterprise to seamlessly and securely adopt any new software system (because an individual's identity does not change from system to system). This novel solution means that one security solution can be used without friction across an enterprise's entire ecosystem. That's a huge plus. Consequently, Okta has been winning share in the cloud security market (50%-plus revenue growth rates for the past several quarters) and projects to continue to keep winning share for the foreseeable future as identity-based solutions gain traction. * 10 Medical Marijuana Stocks to Cure Your Portfolio In sum, then, Okta projects as a big revenue and profit grower over the next several years. All that growth will inevitably power a bright future for OKTA stock. Tesla (TSLA)Source: Tesla It hasn't been all rainbows and sunshine for electric vehicle maker Tesla (NASDAQ:TSLA). Instead, it has been a very bumpy ride, with the stock ultimately going nowhere over the past several years.But, long-term investors would be wise to zoom out and see the forest through the trees. In the big picture, electrification is the future of transportation. Consumers globally are starting to recognize the value and importance of replacing gas-powered cars with EVs, and because it has become cool to be eco-friendly, they are also increasingly adopting EVs. At the same, legislation globally is pushing for broader EV adoption. The result? EV adoption rates will go from a few percentage points of the global auto market today, to 20%-plus over the next decade.That implies huge growth for the EV industry over the next decade. At the heart of all this growth is Tesla. Tesla owns 60% of the U.S. EV market, and that share has steadily grown over the past several years. Globally, Tesla owns over 10% of the market, and that share is also up over the past several years. With new models coming soon, it's reasonable to assume that Tesla will remain a relevant player in this market for several years to come.Thus, in the big picture, Tesla in a decade projects as a very important player in a huge EV market. That positioning will ultimately result in TSLA stock ending next decade significantly higher than where it trades hands today. Twilio (TWLO)Source: Web Summit Via FlickrThe long-term bull thesis on Twilio (NASDAQ:TWLO) is very simple. Communication is becoming an increasingly important part of the consumer experience, and Twilio enables that communication.In a nutshell, we are pivoting toward an experience economy. For consumer-facing brands, this translates as: no longer is it all about the product or service you sell, but it's also about the consumer experience that comes with buying that product or service. Thus, consumer-facing brands are increasingly looking to enhance their consumer experience. One way to do so is by integrating communication, i.e., the ability to communicate directly with consumers to improve their experience.Twilio provides the technological backbone which powers this brand-to-consumer communication. Over the next several years, this brand-to-consumer communication will become the norm in consumer experiences everywhere. That means Twilio will become part of the budget at every consumer-facing brand, which translates into huge revenue and profit growth potential over the next several years. * 10 Real Estate Investments to Ride Out the Current Storm As profits march higher over the next several years, so will TWLO stock. Canopy Growth (CGC)Source: Canopy Growth One of the biggest growth industries in the 2020's will be the cannabis market, and the company that projects to be at the head of all the growth is Canopy Growth (NYSE:CGC). That's why you buy CGC stock for the next decade.Current ground-level consumption trends -- many surveys and data-points suggest that recreational cannabis usage is nearly as common as alcoholic beverage usage -- and global legislative trends -- legislation everywhere is progressing towards full legalization of cannabis -- together imply that the legal cannabis market could be huge one day, and that all that growth will materialize relatively soon. Realistically speaking, the bulk of the legal cannabis market growth narrative will materialize between 2020 and 2030.The biggest company in this space right now is Canopy Growth. They have the biggest reach, the most production capacity, and the highest sales volume. They also have the widest global distribution network, the biggest balance sheet, and have been making the most aggressive expansion-oriented moves in the space. Thus, Canopy is really unrivaled in the cannabis world right now, and as such, projects to be a big grower in the 2020's as the cannabis market goes global.The result? Canopy's revenues will soar over the next decade. That huge revenue growth will drive dramatic margin improvements, and will one day result in huge profits at scale. Those huge profits will translate into a CGC stock price in a decade that should be meaningfully higher than today's stock price. Alibaba (BABA)Source: Shutterstock The China growth narrative has hit a major road-bump over the past two years as China's consumer economy has dramatically slowed. But, this growth narrative is far from over, and the long-term fundamentals here imply that China's most important consumer stock -- Alibaba (NYSE:BABA) -- will soar in the long run.China's once red-hot consumer economy has cooled recently, weighed by a combination of consumer fatigue and trade war inspired uncertainty. But, the fundamentals imply that this recent weakness is just a temporary slowdown in what still projects as a long-term growth market. Specifically, China's internet penetration rates, per capita income levels and per capita consumption rates remain well-below developed nation averages. Thus, China still has a long way to go before its economy is as urbanized and digitized as the economies of Europe and North America.China will get there one day. As such, China's consumer economy will continue to expand at an impressive pace over the next decade. As it does, China's big consumer-facing companies will continue to grow with equally impressive pace. The biggest of those consumer-facing companies is Alibaba. Consequently, Alibaba projects to remain a big grower for the next several years. * 7 Transportation ETFs That Are Ready to Rally Right now, sustained big growth is not priced into BABA stock. Thus, as sustained big growth materializes over the next several years, BABA stock will soar higher. Chegg (CHGG)Source: Shutterstock When it comes to Chegg (NASDAQ:CHGG), the long-term bull thesis is all about the digitization of the world's massive education market.The story here is simple. Today's high school and college students spend all their free time in the digital channel, with their heads buried in their phones sending Snaps, posting Instagram stories and watching YouTube videos. But, when they go into the classroom, very few things are digital -- teachers still write on white boards and students still take notes on paper.In other words, the digital transformation, which has changed the landscape of the consumer economy, has yet to hit the education market. This has created a huge disconnect between how students interact with their education materials, and how they interact with everything else.Chegg is trying to eliminate this disconnect by creating the world's first connected learning platform that takes the digital revolution, and applies it to the education market. This includes online textbooks, online solutions, on-demand e-tutors, on-demand writing help, online calculators, online test help, so on and so forth. Students love the Chegg ecosystem, mostly because it matches their everyday consumption habits.Over the next several years, Chegg will become the norm for high school and college students everywhere. There are 36 million high school and college students in America alone. Chegg only has 3 million subscribers. Thus, in the long run, Chegg will grow by a tremendous amount, which should lead to equally tremendous growth in CHGG's stock price. Beyond Meat (BYND)Source: Shutterstock You want to buy and hold Beyond Meat (NASDAQ:BYND) meat stock for the long haul because this company is in the top of the first inning of a huge plant-based meat growth narrative that will ultimately result in BYND stock heading meaningfully higher over the next decade.The bull thesis breaks into three parts. First, plant-based meats will one day turn into a sizable chunk of the huge global meats pie. Second, Beyond Meat will remain an important player in that soon-to-be huge global plant-based meats market. Third, realistic assumptions imply that BYND stock could be a multi-bagger.As I've discussed on InvestorPlace before, the numbers are simple:"The global meats market measures in around $1.4 trillion today. It will gradually grow to about $1.5 trillion by 2030. Global plant-based meats measure in around $12.1 billion today, or just under a percent of total meats sales. Plant-based dairy accounts for 14% of total dairy sales. That number is only growing, and current consumption trends indicate that plant-based meat can actually exceed that level of penetration at scale. By 2030, plant-based meats could account for 20% of the $1.5 trillion global meats market, or for about $300 billion in total sales."Let's say Beyond Meat turns into a 5% player in that market at scale. That implies $15 billion in revenue. Management has said gross margins will run toward 35%. Given the opex rates at other big meats players, Beyond Meat could realistically push its opex rate down to 20%. Thus, operating margins of 15% on $15 billion in revenue seems doable at scale. Doing the math on that and accounting for taxes, that combination should produce around $1.8 billion in net profits. Based on a market-average 16-forward multiple, that equates to a $30 billion market cap at scale. * 7 AI Stocks to Watch With Strong Long-Term Narratives BYND stock has an ~$10 billion market cap today. Thus, in the long run, this stock could triple. Axon (AAXN)Source: Shutterstock The long-term bull thesis on Axon (NASDAQ:AAXN) circles around this idea that, within the next several years, technology will increasingly transform the law enforcement industry in a big way, and that Axon will be the company at the heart of this technological transformation.Much like the education market, the law enforcement industry has been somewhat slow to pivot to the digitization trend. Axon is changing this. Through its portfolio of next-gen solutions, Axon is attempting to digitize the entire law enforcement industry, from head to toe. These solutions include smart weapons, body cameras, dash cameras, cloud archiving solutions, so on and so forth.Law enforcement agencies are increasingly adopting these solutions, partly because they have to keep up with the times and partly because they want to because they increase operational transparency and efficiency. Importantly, they are adopting Axon's solutions, simply because there is no other viable competitor in the market.Thus, as the law enforcement world continues to digitize over the next several years, Axon's revenues and profits will remain on a healthy long-term uptrend. That will keep AAXN stock on an equally healthy long-term uptrend.As of this writing, Luke Lango was long FB, SHOP, LK, TTD, ROKU, SQ, OKTA, TSLA, TWLO, CGC, BABA, CHGG, BYND and AAXN. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Real Estate Investments to Ride Out the Current Storm * 7 Marijuana Penny Stocks to Consider for Those Who Can Handle Risk * 7 Safe Dividend Stocks for Investors to Buy Right Now The post 15 Growth Stocks to Buy for the Long Haul appeared first on InvestorPlace.
Every investor looks for a winner, and while “past performance does not guarantee future returns,” it’s only natural to look at stocks which have been successful when choosing a portfolio. Here, we look at three stocks have more than doubled in value over the past twelve months and show every sign of keeping their gains and continuing to return performance for investors. The NASDAQ index is up 18% this year, but all three of these stocks have surpassed that by an order of magnitude. Cronos Group, Inc. (CRON) Canada’s third largest cannabis company is up 124% in the last year. The company has benefited from the general gains of the cannabis industry in the wake of Canada’s sweeping legalization of marijuana in the second half of 2018. Q2 results, released last week, underline the gains. Cronos beat Wall Street’s expectations by a country mile, posting a C$0.22 earning per share instead of the forecast C$0.02 loss. Gross revenues, at C$10.78 million, were almost double the expected C$5.6 million. A company statement said that a combination of increased production and increased demand in the adult-use recreational market supported the quarter-over-quarter revenue growth.Cronos’s gains are less surprising when put into the company’s particular context: it’s positioning itself as primarily a CBD supplier, dealing in the non-psychoactive cannabidiol derivatives prevalent in the medial markets. CBD and other derivatives lie on the high-margin end of the marijuana industry, so Cronos should see future gains accordingly. The CBD market is expected to show a steep growth curve over the next few years, expanding more than 100% compounded annually through 2023.Cronos ended 1H19 with one serious drawback and one big advantage in its ledger. As a potential pothole, the company lags its peers in cannabis production. Where Aurora (ACB), Canada’s largest producer, predicts reporting 25,000 to 30,000 kilos available for sale last quarter, Cronos only sold 1,584 kilos in Q2. Cronos will have to address this issue, and improve production going forward, if it wants to remain profitable.On the plus side, Cronos ended Q2 with an enormous cash reserve. The company has over C$2.3 billion– about 39% of its total market cap – available in a combination of cash-on-hand and short-term investments. This cash boon comes mainly from tobacco company Altria’s (MO) recent US$1.8 billion investment in Cronos.New markets are uncertain, and like many companies making a mark in the newly legalized cannabis industry, Cronos reflects that uncertainty with mixed reviews from the analysts. The strong earnings, report, however, has brought it two well-deserved buy ratings. Writing from CIBC, John Zamparo reiterated his Outperfom on the stock, and set a C$25 price target, implying an upside of 43%. Piper Jaffray analyst Michael Lavery was impressed enough after the Cronos earnings call, when the company gave clarification on future product and sourcing pricing matters, that he initiated coverage of CRON with a Buy rating and a price target of US$18. His target suggests an upside of 35% for CRON shares.Overall, Cronos Group has a Moderate Buy from the analyst consensus, based on 3 buys, 3 holds, and 1 sell given in the past three months. Shares are selling for US$13.25 in New York, so the US$22.50 average price target gives an upside potential of 69%. Roku, Inc. (ROKU)This Over-the-Top online video streaming company is up 130% since a year ago, reflecting the dynamism of the Video-on-Demand sector. A direct competitor of Netflix (NFLX), Roku is positioning itself for continued growth in the online streaming business, even as Apple (AAPL) and Disney (DIS) enter the field later this year. Roku will survive by supporting numerous streaming companies through its hardware, collecting royalties on subscriptions and providing customers what they really want: variety in programming.It’s a strong model, with plenty of potential in rapidly expanding niche, and this month’s Q2 earnings report bears that out. Roku clobbered Wall Street’s estimates, beating the EPS forecast by 14 cents per share. Revenue grew 59% quarter-over-quarter, coming in at $250 million against a forecast of $224 million.In the wake of the blockbuster earnings report, Rosenblatt’s Mark Zgutowicz (a 5-star analyst according to TipRanks) upgraded ROKU shares from Neutral to Buy, saying, “Roku's earnings report marks the second consecutive quarter of strong growth across hours viewed, average revenue per user and users. The strong performance signals the company isn't facing hurdles in reselling inventory at a premium cost… Roku's momentum can sustain over the coming years and the company could penetrate around 50% of the total addressable market of 138 million households in 2027.” Zgutowicz backed up his optimism on the stock by nearly doubling his price target – from $77 to $134. His new target may not be high enough, however, as ROKU shares are on a tear, having gained 33% since the earnings release.Stephens’ Kyle Evans (a 4-star analyst) also upgraded ROKU shares after hearing the Q2 earnings. He wrote of the company, “We believe Roku's fundamentals remain sound and that its nexus business model will continue to power solid financial results.” Evans also increased his price target, from $84 to $120, but Evans’ target, too, has been outpaced by ROKU’s market performance.That Wall Street’s analysts will have to set new, higher, price targets for ROKU is borne out by the most recent rating, from Needham’s Laura Martin (a 5-star analyst). Martin was impressed by the earnings, but sees Roku’s biggest advantage in its business model: “The list of streaming video providers continues to expand and presents a complex or confusing sentiment for consumers with more than one subscription. Roku offers the convenience of aggregating both big and small providers on one easy-to-use platform.” She gives the stock a $150 price target, suggesting an upside of 11%. Justifying her position, Martin adds, “Online aggregators who get ahead, stay ahead.”ROKU shares are selling for $134, 14% higher than the average price target of $115. That average, however, is based on targets set the day after the earnings report; as noted above, ROKU shares have jumped 33% since then. Roku maintains a Moderate Buy rating from the analyst consensus, based on 7 buys, 4 holds, and 1 sell given in the past three months. Of the Buy ratings, 6 were set last week, indicating how quickly a market consensus can shift. Shopify, Inc. (SHOP)Headquartered in Ottawa, Canada, Shopify is best known for its eponymous e-commerce platform. Shopify offers online merchants a set of tools to facilitate customer engagement, marketing, payment processing, and product shipping. The success of the platform has supported the stock’s 145% gain over the past year. The company’s year-to-date gain, of 164%, is even more impressive. For comparison, the S&P 500 is up 15% year-to-date.Shopify’s earnings have reflected the stock’s gains. For Q2, the company reported a massive beat on earnings. The 14 cent EPS was seven times higher than the 2-cent expectation, and the quarterly revenue of $36 million easily passed the $350 million analysts had forecast.Investor confidence and high earnings have brought in plenty of love from those same analysts. Writing from Canaccord, David Hynes (a 5-star analyst) said, “Shopify's results included 48% revenue growth, operating profitability, and gross merchandise volume that surpassed $1B per week… Shopify has the underpinnings of what could be a $100B market cap company in the next 6-8 years. Look for pullbacks in the stock as opportunities to add to positions.” Hynes gives SHOP shares a $385 price target, suggesting an upside potential of 5% from current prices.Hynes is not the only analyst to bump up his price target on SHOP. KeyBanc’s Josh Beck (a 5-star analyst) also set a $385 target, noting, “The growth runway at Shopify is substantial… Shopify's cloud-based, mobile-centric platform is well positioned…” And writing from Wells Fargo, Timothy Willi (a 4-star analyst) set the most aggressive price target, of $400. He said of the company, “Shopify also noted a stronger than expected response to its fulfilment network… That will benefit new merchant acquisition while helping existing merchants reduce shipping costs and times and drive further gross merchandise volume growth.” Willi’s price target indicates a possible 9% upside for SHOP.Like Roku above, Shopify’s share price has posted strong gains in the immediate aftermath of an expectation-beating earnings report. The current share price of $366 is 6% higher than the price target of $343. The stock gets a Moderate Buy from the analyst consensus, based on 12 buy, 8 hold, and 2 sell ratings in the past three months. Of the buy ratings, 8 have been given since the August 1 earnings release.Find out what stocks are hot at TipRanks' Analysts' Top Stocks page.
There's no denying Shopify (NYSE:SHOP) has shocked the world. SHOP stock is up more than 165% in 2019, and Shopify stock has rallied an incredible 2000% since its 2015 IPO by doing what many said can't be done. That is, penetrating an e-commerce market dominated by Amazon (NASDAQ:AMZN).Source: Shutterstock SHOP's magic formula has been behind the stratospheric surge of SHOP stock. That formula involves empowering online merchants with tools and information that eBay (NASDAQ: EBAY) and Amazon don't exactly want their sellers to have. The fact that 5,300 companies are using Shopify's products shows that it's got what businesses want. * 7 Large-Cap Stocks to Sell Right Now The enthusiasm of the owners of SHOP stock is understandable.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe huge rally of Shopify stock in just the past few months, though, has left SHOP stock uncomfortably vulnerable to profit-taking and short-selling. Shopify's growth doesn't justify the current valuation of SHOP stock. Shopify Validates the Business ModelFor ages, investors have argued about how far into the future they should look.Amazon is the obvious poster child for an answer along the lines of "many, many years." It was a habitual money loser since its inception in 1994, and didn't start turning consistent profits until 2015. But, now that it's in the black, it's tremendously in the black.Shopify may well be on a similar path.There's a dangerous difference between Amazon then and Shopify now, however. Then, it wasn't entirely clear that e-commerce could ever be profitable. Now, with the industry fully matured, it clearly can be profitable. As a result, many companies with new approaches will enter the sector, while established players like Walmart (NYSE:WMT) are stepping up their game.SHOP, in fact, is one of those newcomers. It's the un-Amazon. It's not even eBay facilitating the establishment of truly independent e-commerce platforms.Others will follow. Shopify Stock Really Does Have a Valuation ProblemThis competition won't be problematic for Shopify stock, though. Indeed, even though Shopify's 10% share of the all-in-one e-commerce platform market is less than that of WooCommerce's and Squarespace, SHOP has arguably already won the battle for mind-share. It should be the market leader, sooner or later.As of the most recent look, however, SHOP stock, with a market cap of $44 billion, is valued as 34 times its trailing 12-month revenue of $1.3 billion. That's not 34 times its earnings, to be clear, which would be considered frothy by most standards. That's 34 times revenueSHOP stock reached that huge valuation even though SHOP wasn't consistently profitable until last year. Based on this year's projected profit of $69 million, SHOP stock is valued at 637 times SHOP's earnings.That's not necessarily the end of the world. Shopify is a work in progress. The market has rewarded less successful names, with less promising prospects.But the point where the current SHOP stock price of $369 will be justified is so far down the road that it can't actually be seen. The 2021 outlook for revenue of $2.7 billion and net income of $218 million still leaves Shopify stock valued at 16.3 times the company's sales and more than 200 times its earnings.On average, stocks are valued at three times companies' revenue, and between 15 and 20 times their earnings.Most people don't realize that the current valuation of Shopify stock isn't justified. It's all based on hype, rooted in the premise that somebody finally figured out how to beat Amazon at its own game. Shopify would have to obliterate its estimates for the next several years to justify the current price of SHOP stock (let alone a higher price) at a time when competitors are improving their own products. The Bottom Line on SHOP StockI'm not suggesting SHOP stock is destined to immediately roll over and lose a big chunk of its value.It's entirely possible -- even likely -- we're at the start of something of a melt-up, as the fear of missing out on continued rallies by Shopify stock pulls more buyers into the incredible rally. Things like fundamentals don't matter until the majority of traders decide they matter, and right now, they don't matter for Shopify stock. A short squeeze may also be in play, artificially pushing the shares higher.Make no mistake though. Every stock always eventually reflects tangible value. Even on a risk-adjusted, potential-adjusted basis, SHOP stock is already in jeopardy.Tread lightly.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 8 Dividend Aristocrat Stocks to Buy Now No Matter What * 7 Stocks to Buy to Ride the Vegan Wave * 4 Safe Stocks to Buy Amid Trade War Turbulence The post Shopify Is Crushing It, But SHOP Stock Is Set to Be Crushed appeared first on InvestorPlace.
Shopify's growth is slowing and trades at a substantial premium. Eventually, the share price will come back down to earth and present a better entry opportunity.
Companies that turn in better-than-expected earnings are rewarded by better-than-average stock returns. Why Take-Two Interactive, Shopify, Match Group, and Advanced Micro Devices will continue to shine.
There are roughly 4,700 stocks on U.S. exchanges with a market capitalization over $50 million. Of that group, 94 -- almost exactly 2% of the total -- have been the best stocks in the market over the past year, gaining more than 100% over that period.From a sector standpoint, there aren't a lot of surprises in the group. The three best stocks over the past twelve months all are biotechnology plays -- a sector that often provides either huge gains or huge losses. Small-cap tech, another high-risk, high-reward category, provides another chunk of winners, including stocks like Digital Turbine (NASDAQ:APPS) and GlobalSCAPE (NYSE:GSB), both of which have tripled in 2019 alone. * 10 Internet Stocks Getting Hammered The obvious question is how these stocks will perform going forward. In some cases, 100%+ gains are a sign of a company significantly outperforming expectations. In others -- particularly in what remains a bull market -- that kind of upside suggests a stock that may have outrun its fundamentals. These 10 stocks all have posted big gains over the past year, but some may head in a very different direction over the next twelve months.InvestorPlace - Stock Market News, Stock Advice & Trading Tips What You Can Expect From the Best Stocks of 2018 Today: Shopify (SHOP)Source: Shutterstock 1-Year Performance: +140%The gains in Shopify (NYSE:SHOP) stock have been truly impressive. No stock in the market has added more value over the last 12 months than SHOP stock. Shopify's market capitalization has risen by nearly $23 billion over that period. To put that figure into perspective, those gains are equal to the entire market capitalization of United Airlines (NASDAQ:UAL).What makes the rise even more impressive is that all of the gains have come just in 2019. But at this point, there's an obvious question as to whether the gains can continue. SHOP stock trades at a staggering 18x next year's revenue estimates, and roughly 350x 2020 consensus earnings-per-share. This week, InvestorPlace contributor Josh Enomoto argued that it was time to take profits in SHOP -- it's difficult to disagree with that sentiment.That said, there's little reason to see the gains suddenly ending. New plans to provide fulfillment for online sellers add another potential profit stream for Shopify. More broadly, investors who have seen growth stocks as "too expensive" in this market generally have missed out on big gains. (Indeed, I made precisely that case on SHOP stock earlier this year; that argument looks close to silly in retrospect.)It does seem like at some point SHOP stock at least needs to slow down, given valuation multiples that are the highest in the market among stocks its size. But nothing has stopped Shopify stock yet, which might mean it can continue to defy gravity for some time to come. Axsome Therapeutics (AXSM)Source: Shutterstock 1-Year Performance: +876%Even including nano-caps, no stock in the market, on a percentage basis, has outperformed Axsome Therapeutics (NASDAQ:AXSM). AXSM stock has gained a stunning 876% over the past year and it has risen 783% in 2019 alone.These types of gains aren't completely unprecedented in the biotechnology space, where stocks can rise by several hundred percent -- or lose most of their value -- on a single trial result. And Axsome's flagship compound, AXS-05, has real potential. The drug has entered Phase III trials for treatment of major depressive disorder, agitation in Alzheimer's and smoking cessation. * 7 Marijuana Stocks With Critical Levels to Watch With a market cap still under $1 billion, AXSM stock could run higher if trials further validate the company's core product. Compounds elsewhere in the pipeline aim to treat migraines and narcolepsy, among other disorders. But as biotech investors know all too well, it takes only one piece of bad news for big gains to reverse in a hurry. Amarin Corporation (AMRN)Source: Shutterstock 1-Year Performance: +481%The good news for Amarin Corporation (NASDAQ:AMRN) is that its stock is up 481% over the past 12 months. The bad news might be that its stock is down 15% over the past 10 months.Indeed, all of the stock's gains came in a short burst last September. A successful clinical trial of the company's Vascepa, a prescription Omega-3, led AMRN to better than quadruple in a single day. The stock kept rising, gaining 579% in just nine sessions.Since then, however, some of the old skepticism toward Amarin has returned. After all, bears argue, Vascepa simply is derived from fish oil, which in theory means it can be easily replicated.But Wall Street, at least, sees it very differently. The average target price of $33 suggests nearly 100% upside from current levels. It very well could be that, once again, skeptics toward AMRN are going to miss out on big gains. Coca-Cola Consolidated (COKE)Source: Shutterstock 1-Year Performance: +114%It's not entirely clear why Coca-Cola Consolidated (NASDAQ:COKE) has gained so significantly over the last year. The company is a bottler for Coca-Cola (NYSE:KO), which is hardly the type of business model to see 100%+ gains over a short period of time.Coca-Cola Consolidated has posted decent results so far this year, but they've hardly been spectacular. First-half physical case volume rose just 0.3% year-over-year. Gross profit dollars did increase 8%. But this is a stock now trading at 39x the sole analyst estimate for next year. That seems like a huge multiple for a business that is posting single-digit growth. * 10 Stocks to Buy on the Trade War Dip There is a theory that COKE stock has risen because some smaller investors -- potentially those using the Robinhood app -- are mistaking COKE for KO. Whatever the cause, it does seem like COKE has run too far. But even if that's the case, it's not clear when the stock will pull back, or how far it might have to fall. Match Group (MTCH)Source: Shutterstock 1-Year Performance: +115%Last May, shares of Match Group (NASDAQ:MTCH) fell 22% in a single session. The decline didn't come from anything Match itself had done. Rather, Facebook (NASDAQ:FB) had announced its entry into the dating space and investors fled MTCH stock as a result.Those investors that sold Match Group stock would regret it. Since that selloff, MTCH stock has nearly tripled. It has gained 115% over the past year, with its $15 billion gain in market value second only to Shopify.The gains may not be over. MTCH gained 24% on Wednesday after a blowout quarter. The user base for Tinder continues to soar, with subscribers rising 39% year-over-year in the second quarter. Match is dominating online dating -- a market that should only grow in the U.S. and, more importantly, overseas.To be sure, MTCH stock isn't cheap at these levels. It trades at 46x 2020 EPS estimates, even though those estimates are likely to rise after the company forecast stronger growth in the second half of 2019. But, in this market, online plays that dominate their space get big multiples (see Etsy (NASDAQ:ETSY), for instance). And betting against MTCH has proven to be foolhardy so far. Workiva (WK)Source: Workvia1-Year Performance: +145%One of the more difficult aspects of this bull market is that investors have had to figure out how to value stocks whose earnings are negative. Data play Workiva (NYSE:WK) is one of those stocks. The company is guiding for an adjusted operating loss in 2019 -- yet WK stock gained 13% on Wednesday after updating that outlook.To be sure, data preparation and collection has been a hot space. Salesforce (NYSE:CRM) paid $15.7 billion for Tableau Software earlier this year. Smaller data prep play Datawatch was taken out by Altair Engineering (NASDAQ:ALTR) late last year. More broadly, investors clearly have been willing to pay up for growth in recent years. * 7 Stocks to Buy to Ride the Vegan Wave That said, there is a case that the gains in Workiva stock have gone a bit too far. WK now trades, even backing out cash, at over 9x revenue. Growth is solid, but at a guided 19% this year not quite spectacular. At the very least, it does look like the easy money has been made. The Trade Desk (TTD)Source: Shutterstock 1-Year Performance: +189%So-called "adtech stocks" like The Trade Desk (NASDAQ:TTD) hadn't been very good investments until recently. Rocket Fuel went closed its first day of trading at $55 and sold itself for less than $3 to Sizmek. The combined company wound up selling its assets for just $36 million.YuMe went public at $9 -- and sold for less than $2. Marin Software (NASDAQ:MRIN) is down 98% from its highs.But for the winners, including The Trade Desk, the news has become notably better of late. While leaders like Facebook and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) took up most online advertising growth, other providers are starting to flex their muscles. So-called "programmatic" marketplaces like the one run by TTD are seeing greater adoption as a result.TTD isn't alone in soaring. The Rubicon Project (NASDAQ:RUBI), after losing 90% of its value, has risen 400% from early 2018 lows -- and roughly matched TTD's performance over the past year.For TTD, valuation does look a bit stretched: The stock trades at 70x next year's EPS estimates. And it's worth wondering what happens if the online advertising space sees another soft patch, as it did just a few years ago. This seems like a story that sounds better on paper -- online advertising growth should continue for years going forward -- than in practice. The market may grow, but the history of that market shows that third-party providers don't always benefit. Cronos Group (CRON)Source: Shutterstock 1-Year Performance: +145%Cannabis stocks like Cronos Group (NASDAQ:CRON) have mostly pulled back in the past few months. And so performance over the past twelve months generally doesn't look all that impressive.CRON stock, too, has pulled back, dropping almost 40% from March highs. But even with that weaker trading of late, the stock still has gained 145% over the past year, and is up 1,000% from 2017 levels.The question with CRON, as it is for much of the sector, is whether valuation remains stretched even after the pullback. The Canadian market looks somewhat disappointing. Legalization elsewhere is moving slower than hoped. And as I wrote last month, Cronos is taking its time as the market develops, which suggests investors should do the same. * 5G Stocks With 10X Potential That said, marijuana companies still have a massive potential opportunity worldwide. And it's possible the weakness of late, in retrospect, will look like a buying opportunity. But patience might be a virtue when it comes to Cronos Group stock. MongoDB (MDB)Source: Shutterstock 1-Year Performance: +142%High-growth software plays are trading at nosebleed valuations. But even in that context, MongoDB (NASDAQ:MDB) is one of the most expensive stocks out there. MDB stock trades at well over 20x 2019 revenue.Of late, however, the rally has stalled out somewhat. MDB has pulled back 23% from highs reached after fiscal Q1 earnings in June. Recently, InvestorPlace contributor Luke Lango argued that the weakness was a buying opportunity, and given the company's explosive growth, there's a case he's right. Revenue increased 78% year-over-year in the fiscal first quarter, and increased adoption of the company's platform should keep growth sizzling for some time to come.That said, this remains a company valued at $8 billion, with negative earnings. And in a suddenly jittery market, it's not hard to wonder if a better price might be on offer. Investors so far have been rewarded for shrugging off valuation concerns. But as with so many software plays, the question is for how long that will last. Roku (ROKU)Source: Shutterstock 1-Year Performance: +158%The 12-month gains in Roku (NASDAQ:ROKU) are reasonably impressive. YTD performance, however, has been even better. ROKU stock now has nearly quadrupled so far this year, easily reversing a steep decline in last year's fourth quarter, and then some.Here, too, the question is whether the gains have to end at some point. Roku's growth is impressive. Q2 earnings look like a blowout. Its importance to the streaming media ecosystem at a time of cord-cutting is obvious. But its valuation, as I wrote in June, is even steeper than headline numbers suggest.After all, about one-third of this year's revenue will come from the sale of Roku players. Gross margins in that business are in the single-digits, meaning hardware sales are likely unprofitable. Back out that revenue, and ROKU stock trades at over 20 times its guidance for platform (i.e., digital), revenue.That figure, in the context of the overall market, doesn't sound that high. Of course, that raises the question of whether the market simply has pushed growth stocks like ROKU and MDB too far. But that worry aside, Roku still gets minimal revenue from Netflix (NASDAQ:NFLX) and Alphabet unit YouTube -- two of the biggest companies in streaming. And so the argument that Roku is a natural beneficiary of cord-cutting seems thinner than some investors might think. * 7 Winning High-Yield Dividend Stocks With Payouts Over 5% It may be that streaming offerings from Disney (NYSE:DIS), Comcast (NASDAQ:CMCSA) and AT&T (NYSE:T) will accelerate revenue growth, as those media companies fight for consumer attention. Roku could be an acquisition target at some point. Those potential catalysts are part of all the good news that surrounds Roku. The question after nearly 300% gains in seven-plus months is whether even those catalysts are priced in.As of this writing, Vince Martin did not hold a position in any of the aforementioned securities … though he wishes he did. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 8 Dividend Aristocrat Stocks to Buy Now No Matter What * 7 Stocks to Buy to Ride the Vegan Wave * 4 Safe Stocks to Buy Amid Trade War Turbulence The post How the 10 Best Stocks From Last Year Hold Up Today appeared first on InvestorPlace.
I'll freely admit that I've been wrong about Shopify (NYSE:SHOP) because claiming otherwise is just ludicrous. Shopify stock easily qualifies as one of the top investments of this year. Since January's opening price, shares have skyrocketed nearly 140%. And it's not just technical sentiment driving this ecommerce platform: there's fundamental justification here.Source: Shutterstock Primarily, this comes in the form of a massive beat for its second quarter of 2019 earnings report. And "massive beat" doesn't really do this performance justice. Against a consensus per-share profitability target of three cents, the actual earnings per share came in at 14 cents.Moreover, the company's revenue haul impressed market observers. Prior to Q2, the consensus called for top-line sales of $350 million. Instead, SHOP rang up $362 million, or a 3.4% positive surprise. To no one's surprise, Shopify stock surged more than 7% on the financial disclosure.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Generation Z Stocks to Buy Long And management didn't stop there, raising expectations for both Q3 and full-year revenue. The company guided a range between $377 million to $382 million for Q3, and $1.51 billion to $1.53 billion for fiscal 2019. Previously, Wall Street's forecasts were $374 million, and a range between $1.48 billion to $1.5 billion, respectively.Indeed, SHOP stock sets a fresh benchmark for what it means to be a growth investment. In the year-ago quarter, EPS was only 2 cents. And revenue was down at $245 million, or a gap of $117 million.Add in their $1 billion investment toward a distribution network and its international expansion plans, and you have even more compelling reasons to consider Shopify stock.But with so much enthusiasm baked into shares, is now the right time to gamble on Shopify stock? SHOP Stock Is Telegraphing a CorrectionAlthough I don't have any skin in this game, at this juncture, I can provide an objective assessment: it's likely in your best interest to trim your stake.First, the post-Q2 movement in SHOP stock has been less impressive. In fact, as of the time of this writing, shares have almost lost their Q2 bump. If Wall Street truly believes in Shopify's growth narrative, they're currently doing a poor job demonstrating it.Second, the finer print from the last earnings report isn't as impressive as many analysts have claimed. For instance, folks are going crazy over the fact that year-over-year sales growth is nearly 48%. But in Q2 2018, the YOY growth rate was a much more robust 61.5%. Click to EnlargeIn fact, ever since Q4 2015, the YOY growth rate has steadily and consecutively declined. Mathematically, I don't find this trend that surprising. Although speculators love this stock, the reality is that on a nominal basis, we're still dealing with relatively small numbers. Therefore, as the company's nominal sales haul increases, its growth rate should diminish.Consider that in 2016, the YOY quarterly sales growth rate averaged 90.5%. In 2017, this metric slipped to 73.3%. The following year, it dropped again to 60.4%. In the first half of 2019, we're looking at 49%.These are dramatic declines, and current trends suggest these declines will worsen. Thus, I anticipate that many growth investors will pocket their profits in SHOP stock before moving onto something "growthier."And please don't get me wrong: I'm not suggesting that Shopify stock is a bad investment. I already made that mistake before and I'm not going to repeat it. That said, let's be practical: why hold SHOP stock if others will probably dump it? Low-Hanging Fruit Is Gone for Shopify StockOne of the reasons why SHOP stock was initially so successful was that the underlying company carved out a niche. Its platform gave small businesses a chance to compete with the big boys.Now, Shopify stock must also compete with the apex predators in the broader e-commerce business. In order to move to the next level, management must take greater risks for incrementally lower returns. Put another way, the low-hanging fruit is gone. They're batting in the big leagues.Unfortunately, that's problematic for a relatively small outfit like Shopify. For instance, their distribution network is designed to compete with Amazon (NASDAQ:AMZN). But Amazon is nearly a trillion-dollar company. No one is going to disrupt this beast.Additionally, Facebook (NASDAQ:FB) will continue to invest in its Instagram shopping app. Facebook could also one day become a trillion-dollar firm. What I'm saying here is that these giants have the resources to tinker and experiment. Once they find the right formula, they could put a hurting on SHOP stock.Of course, we're talking about events further down the road. In the meantime, Shopify stock looks very stretched. From just a practical standpoint, it again doesn't hurt to consider trimming your exposure.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Generation Z Stocks to Buy Long * 5 Growth Stocks to Buy After the Rate Cut * 5 Dependable Dividend ETFs to Invest In The post Shopify Stock Is Impressive, but It's Time to Take Some Profits appeared first on InvestorPlace.
President Trump is escalating the trade war between the U.S. and China with a new wave of tariffs - and it could strike the retail sector hard.