|Bid||203.29 x 800|
|Ask||203.53 x 900|
|Day's Range||202.55 - 208.00|
|52 Week Range||112.50 - 209.59|
|Beta (3Y Monthly)||1.86|
|PE Ratio (TTM)||N/A|
|Earnings Date||Apr 30, 2018 - May 4, 2018|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||187.00|
Amazon Is Capitalizing on These Key Advantages(Continued from Prior Part)Amazon cut royalties for video partners From dropping some suppliers as Bloomberg reported to discontinuing its pop-up kiosks program, Amazon (AMZN) has been shaking up many
Recently, I've become increasingly convinced that Salesforce.com (NYSE:CRM) is an important barometer for the tech sector as a whole. CRM stock price isn't the only gauge investors need to watch, But Salesforce stock still seems to provide a pure look at investors' preferences.Source: Shutterstock The key reason why is that Salesforce.com 's story is reasonably simple. It has a fantastic business. No one can dispute that. As CEO Marc Benioff pointed out on its Q4 conference call earlier this month, the company was the fastest enterprise software company ever to reach $13 billion in sales. (The company celebrated its 20th anniversary on Mar. 8) Its revenue growth has been almost bizarrely consistent for years now, hovering generally in the 24%-26% range. * 7 Small-Cap Stocks That Make the Grade And there really aren't any external factors that can materially change its outlook. Microsoft (NASDAQ:MSFT) and Adobe (NASDAQ:ADBE) are trying to compete in customer relationship management, or CRM, software, but the dominance of Salesforce.com appears assured. A downturn in the macro cycle likely would impact Salesforce stock.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut given multi-year contracts and the importance of CRM software to businesses, the impact likely would be manageable. (Note that CRM's revenue more than tripled between 2007 and 2011.)Of course, CRM stock price also isn't cheap or close to it. And so Salesforce stock provides an intriguing answer to an interesting question: what, exactly, are investors willing to pay for growth?Coming off the company's fourth-quarter report, it appears investors aren't sure about the answer to that question. Once they figure it out, the rest of the market may as well. Earnings "Surprise" for Salesforce Stock (Yeah, Right)Salesforce's earnings came in nicely ahead of Street estimates on both the top and bottom lines. That surprised exactly no one remotely familiar with Salesforce stock; as I wrote before the report, Salesforce.com hasn't missed on either revenue or earnings in at least five-plus years.Yet it wasn't good enough. The company's guidance looks a bit disappointing, as Nicholas Chahine detailed after the report. The CRM stock price fell 3.7% on the day of the report and dipped almost 1% on the following day. Salesforce stock wound up falling 6% for the week, but it has since regained the majority of its losses.Bu the initial selloff seemed to confirm the risk facing CRM stock and the market. Bear in mind that the CRM stock price over time has been an exaggerated reflection of the market as a whole. It gained steadily in the first years of the decade, as the market recovered, and its gains accelerated in 2016 and 2017, as the stock market gained steam.Salesforce stock peaked in early October 2018 and then plunged as the Q4 selloff hit. CRM stock lost over 25% of its value in less than three months and took three and a half months to gain it all back, and then some.The profit-taking after the strong Q4 report seemed to suggest that investors were paying more attention to risk, but subsequently, as noted above, CRM stock regained most of the losses it had suffered this month. How High Can the CRM Stock Price Go?The issue at this point is that Salesforce stock is expensive, really expensive. It still trades at about 60 times the company's 2020 earnings guidance. At some point, investors will start worrying about the valuation of even a great business, which Salesforce.com unquestionably is.From here, it still looks like valuation fears drove the initial post-earnings reaction. Disappointing guidance is a good talking point, but again, Salesforce.com never misses analyst estimates. It's reasonably obvious at this point that the company guides conservatively. Meanwhile, Q1 and 2019 projections aside, the company also predicted that its revenue would double again by fiscal 2023.There was nothing wrong with the company's Q4 results. The issue is its valuation. But there's another aspect of Salesforce stock that could demonstrate investors' appetite for risk. Salesforce.com predicts that its non-GAAP EPS will come in at $2.74-$2.76, but that includes stock-based compensation of $1.84 .That's two-thirds of its projected net income. Back that out, and CRM stock is trading at over 172 times the high end of this year's earnings guidance. Some investors have questioned whether Salesforce stock should have such a high valuation. If more investors agree, CRM stock likely would be the first stock to take a big hit. Watch CRM Going ForwardBetween the stock's valuation and the company's share-based comp, CRM obviously is a growth stock. And the relatively simple nature of its outlook means there's one key argument regarding Salesforce stock: what to pay for the business. Bulls will argue that paying up for Salesforce stock has been a great bet for nearly 15 years. Bears will reply that, at some point, the rally has to end.That argument is a stalemate right now. It's worth paying close attention to who wins in the near-term. Where CRM stock goes, other growth stocks - like Square (NYSE:SQ), Shopify (NYSE:SHOP) and Workday (NASDAQ:WDAY) - are likely to follow.If Salesforce stock is too expensive, so is pretty much every other stock in the market; few, if any, of them have as an outlook that's as good as CRM. If investors are willing to pay up for CRM stock now, however, they'll likely be willing to stretch for other growth plays. The pre- and post-earnings movements of CRM stock price show the market isn't quite sure which side to take. At some point soon, that will change.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 5 of the Best Stocks to Buy Under $10 * 7 Single-Digit P/E Stocks With Massive Upside * 7 Best Quantum Computing Stocks Trading Today Compare Brokers The post Keep a Close Eye on Salesforce Stock appeared first on InvestorPlace.
A Look at Amazon's Latest Moves to Refresh Its StrategyAmazon dropping controversial pricing policy Amazon (AMZN) is ending a policy that prohibits third-party merchants from selling their items at lower prices on other platforms than they do on its
Payment Providers Seeking Fat Paychecks: PYPL, SQ, and FISVPayPal lifts loan limit for UK businesses In 2014, PayPal (PYPL) launched its small business lending service in the United Kingdom, betting that British businesses would turn to it not just
Say hello to MongoDB (NASDAQ:MDB). The company behind the world's most used modern database platform went public in late 2017 at a price of $24 per share. MDB stock popped on its first day on Wall Street, and it's been nothing but up, up, and away since then.Source: Shutterstock Most recently, MongoDB reported monster fourth quarter numbers which smashed analyst estimates and included above consensus revenue and profit guides for both next quarter and next year. MDB soared more than 25% in response to all time highs in excess of $130. That means the stock has risen by more than five-fold over the past year and a half.Is this rally sustainable? Or is MDB stock just in a prolonged Wall Street honeymoon phase that's due to end soon?InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Winning High-Yield Dividend Stocks With Payouts Over 5% I think the former. In the big picture, MongoDB is a monster growth company with a unique, interesting, and necessary solution aimed at disrupting the multi-billion dollar software database market.Secular trends are favorable, the company is growing rapidly, the market opportunity is huge, gross margins are high, the business model is attractive, and the long term profit potential is enormous.All in all, MongoDB has all the characteristics of a monster growth stock. The only question, then, is valuation. At $130, the valuation is not stretched enough to unhinge this rally or detract from the long term bull thesis. As such, I think this stock will keep rallying for the foreseeable future, and that any and all big dips should be seen as buying opportunities into a really strong stock. The Fundamentals Are Very StrongMongoDB is a very technical company. Specifically, MongoDB is a general purpose, distributed database platform that combines non-relational and relational database architectures to improve performance, scalability, flexibility, and reliability of software databases.That's a mouthful. But, the idea isn't too hard to understand.Essentially, at the heart of every software application is a database, which is used to store, organize, and process data. Traditionally, these databases were relational, or row-based, since old school data was almost always structured in a row-column manner.Recently, though, technological advancements and a boom in data volume have created a surge in the amount of non-relational, or document-based, data in the world. Companies need to store, organize, and process this data, too, but relational databases have shortcomings in doing so.Thus, over the past several years, there has been a surge in NoSQL, or non-relational, databases. MongoDB is one of these databases. But, the platform is unique in that it takes the best parts of relational databases, combines them with the reduced rigidity inherent to non-relational databases, and delivers a hybrid database platform built for the modern world.Beyond this core narrative, there are a few trends working in MongoDB's favor. First, every company is becoming a tech company, and deploying software applications. Second, every company is starting to use data in increasing frequency to make business decisions. Third, most companies are pivoting to the cloud, a transition that forces them to re-evaluate their database platforms.Given all this, it should be no surprise that MongoDB is growing by leaps and bounds. The customer base grew by 130% last year, and those customers are increasingly spending big money on the platform. Revenue growth has been running in the 50%-plus range for several consecutive quarters.Yet, revenues are still expected at just $370 million next year. The global software database market is nearing $60 billion. Thus, so long as MongoDB continues to win share through its hybrid-derived advantages, this company will remain on a big growth trajectory. Valuation Is Stretched, but Not Too MuchGiven the company's robust fundamental growth narrative and secular tailwinds, it's fair to say at this point in time that MongoDB projects as a big growth company for the foreseeable future. Big growth companies are usually accompanied by high flying stocks, so long as the valuation remains reasonable. Thus, the question of where MDB stock goes next hinges on valuation.Right now, the valuation on MDB is stretched. The company now has a $7 billion market cap. Sales next year are expected around $370 million. That means MDB stock is trading at nearly 20-times forward sales.That's a big multiple. Even for a hyper-growth software company. Two of my favorite hyper-growth software stocks, Shopify (NYSE:SHOP) and The Trade Desk (NASDAQ:TTD), trade at 15-times forward sales, and those sales multiples are about as big as it gets in this sector. Consequently, it's fair to say that the valuation on MDB is stretched here and now, but I don't think it is fundamentally unsupported.If you take a long term view on MDB, it's easy to see that this company projects as 20%-plus revenue grower for the next decade-plus as increasing data volume and variety amplify the need for hybrid database platforms. Gross margins are sky high above 70%. Opex rates are falling with scale, and could reasonably trend towards 40-50%.As such, at scale, this will be a multi-billion dollar revenue company with 20%-plus operating margins. Under those assumptions, my modeling suggests that this could one day be a billion dollar profit company. Based on a software average 30 forward multiple, that equates to a $30 billion market cap one day.In other words, MDB has lot of runway left. So long as the numbers remain strong and support the long term bull thesis, the stock will remain on a winning trajectory. Bottom Line on MDB StockI wouldn't chase the rally in MDB stock here. But, this is a monster growth stock supported by very strong secular tailwinds and robust growth rates. Thus, any big pullback from all time highs should be viewed as a long term buying opportunity.As of this writing, Luke Lango was long SHOP and TTD, and may initiate a long position in MDB within the next 72 hours. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Stocks Sitting on Huge Piles of Cash * The 10 Best Stocks to Buy for the Bull Market's Anniversary * 7 Dividend Stocks With Big Yields Compare Brokers The post MongoDB Has Monster Potential and There's Still Time to Grab MDB Stock appeared first on InvestorPlace.
All You Need to Know ahead of PayPal’s Q1 Results(Continued from Prior Part)PayPal’s loan business faces more competition PayPal’s (PYPL) marketing expenses continued to rise quarter after quarter throughout 2018, and the trend looks set to
Zscaler, Shopify and Twilio stock all registered relative strength lines at new highs on Thursday. Twilio has a relative strength of 99 out of a possible 99.
I've been pretty hard on web store provider Shopify (NASDAQ:SHOP), but investors, and the Shopify stock price, have ignored me. Since tech bottomed at Christmas, Shopify shares have risen from less than $130 to their March 13 opening bid of $202. That gives the company a market cap of $22.4 billion, on 2018 revenue of $1.07 billion.Source: Shopify via FlickrAs far back as 2017 I predicted this would all end in tears, citing a report from short-sellers Citron Research that called Shopify a scam at $60 per share. More recently I noted its lack of operating cash flow and use in drop-ship scams. All this is still true. But it doesn't disturb the bulls. One recent story calls Shopify a "virtual go-to destination for aspiring entrepreneurs and small businesses."InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 15 Stocks Sitting on Huge Piles of Cash Celebrity, Pot and Shopify StockChief operating officer Harvey Finkelstein was recently on the TV, touting Shopify's use by celebrities such as Kylie Jenner and Drake, but also hyping the software's use by Canadian pot sellers.Shopify now touts itself as a Software as a Service (SaaS) ecommerce platform, bragging about the success of merchants like Jenner without noting how little the company makes when one of its customers succeeds.That's because Shopify is like a casino, in that those big buildings aren't built with money from winners. Shopify's results are fueled by 20,000 app developers and agencies that are selling their tools to Shopify sellers. Shopify gets a fat 20% off the top from those sales. Inside the NumbersFor the quarter ending in December Shopify lost $12 million, 1 cent per share, on revenues of $343.8 million. The company's press release noted this was 54% ahead of the previous year, making the loss irrelevant to the investment case.Shopify divides revenue into "subscription solutions," which involve use of the Shopify software, and "merchant solutions," sales made through the app store. It's the app store revenue that's been growing fastest, rising 63% year over year from $129 million in the last quarter of 2017 to $210 million in the last quarter of 2018.I like to look at cash flow, which was a positive $269 million for the year. But operating cash flow was just $9.3 million. The big number was $1.04 billion. That's how much cash went on the books from the public offering. Shopify is rising on the money from its own investors.Shopify's release also details how its income flows. It shows 54% of what comes in is gross profit, with sales and marketing expenses representing 26% of revenue. A lot of Shopify's money goes into finding new customers.The initial reaction when the Shopify numbers came out last month was negative. Analysts were expecting $55 million in earnings. The company said it was "investing heavily" in augmented reality and virtual reality applications, but total investment in research was $67 million. The stock now trades above where it was before earnings. The Bottom Line on Shopify StockI avoid going short on anything because it's easy for bulls to hold shares from short sellers and drive a target's price up. My favorite aphorism is that of the 19th century speculator Daniel Drew, who said of short sellers "He who sells what isn't his'n, must buy it back or go to pris'n." Drew ended his life broke.On the other hand, I also avoid speculation for the sake of speculation. If you buy Shopify now, you're paying over 20 times sales for a company without profits, most of whose cash flow comes from sale of its own stock.I may be missing a profit rocket, but I say thanks but no thanks.Dana Blankenhorn http://www.danablankenhorn.com is a financial and technology journalist. He is the author of a new mystery thriller, The Reluctant Detective Finds Her Family, available now at the Amazon Kindle store. Write him at email@example.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 5 of the Best Stocks to Buy Under $10 * 7 Retail Stocks Winning in 2019 and Beyond * The 10 Best Stocks to Buy for the Bull Market's Anniversary Compare Brokers The post The Shopify Stock Bubble Can Only Keep Getting Bigger for so Long appeared first on InvestorPlace.
Tech Updates: Twitter’s New Tool, Facebook’s US Woes, and More(Continued from Prior Part)Apple is reportedly looking to make its own AR handsetSo far, augmented and virtual reality hasn’t really taken off, possibly because the technology
After a brutal late 2018 selloff, financial markets have been on a healthy and stable recovery path thus far in 2019. Through the first three months of the year, the S&P 500 is up 12%, marking one of its best starts to a calendar year in recent memory.As broader financial markets have stabilized, growth stocks have come back into favor. Indeed, one could say that they've done much more than come back into favor. Many of them have rushed to fresh all-time highs in 2019, and that's after big corrections in late 2018. That means that a handful of these growth stocks have staged huge rallies over the past three months.Which stocks fit into this category? And can these big rallies last?InvestorPlace - Stock Market News, Stock Advice & Trading Tips * Wayfair Stock Is Bound to Experience Pain As Its Rally Ends These are questions investors should be asking as we head into what projects to be a more volatile time for financial markets throughout the balance of 2019. As such, let's take a look at seven growth stocks which have raced to all-time highs in early 2019, and analyze whether or not their big rallies can continue. iRobot (IRBT)Why It's at All-Time Highs: Shares of consumer robotics giant iRobot (NASDAQ:IRBT)have run up to all-time highs prices on the back of a strong double-beat-and-raise fourth-quarter earnings report that emphasized a few positive trends, including continued robust robotic vacuum market expansion, strong margin growth and a mitigated tariff impact.Where It's Going Next: The long-term IRBT growth narrative is positive. This company is morphing into a consumer robotics leader with minimal competition, and as such, will be a big revenue and profit grower for a lot longer as the consumer robotics space expands. Such big revenue and profit growth will keep IRBT stock on a long-term winning trajectory. But, in the near term, the valuation seems stretched at nearly 40x forward earnings. This stock needs to trade sideways for the foreseeable future to allow the fundamentals to catch up. Shopify (SHOP)Why It's At All-Time Highs: Shares of e-commerce solutions provider Shopify (NYSE:SHOP) have notched new all-time highs thanks to renewed macroeconomic confidence and a strong Q4 earnings report in which growth hardly slowed and margins continued to move higher. * 4 CBD Stocks to Buy for Mainstream Marijuana Profits Where It's Going Next: In the big picture, Shopify stock is powered by a secular growth narrative that goes something like this: the world is becoming increasingly decentralized thanks to technology democratizing creation and distribution processes. Shopify is enabling and empower this decentralization in the retail world. As this decentralization trend continues to play out over the next several years, Shopify's merchant base will grow by leaps and bounds. Revenues will roar higher. Profits will, too. So will SHOP stock. As such, the long-term narrative here is very bullish -- bullish enough to make this a long-term buy-and-hold stock. Cronos (CRON)Why It's At All-Time Highs: Shares of Canadian cannabis company Cronos (NASDAQ:CRON) have more than doubled in 2019 and run to fresh all-time highs on the back of a multi-billion dollar investment from tobacco giant Altria (NYSE:MO). Investors have interpreted this investment as a major vote of confidence from a well respected global tobacco giant, at a time when global cannabis market fundamentals are improving. Consequently, they have bid up CRON stock to new highs.Where It's Going Next: The cannabis market projects to be really, really big one day. With a multi-billion dollar investment from Altria in its back pocket, Cronos has the necessary financial resources, business know-how, and distribution networks to one day turn into a major player in this global market. It's fair to say that the stock has gone too far, too fast, and needs to cool off. This is likely what will happen. But, after that cooling off period, CRON stock will resume its uptrend, because the long-term fundamentals here of Cronos turning into a global cannabis giant are quite promising. Wayfair (W)Why It's At All-Time Highs: Shares of online home retailer Wayfair (NYSE:W) have surged over the past few weeks to all-time highs thanks to two things. One, confidence in the macroeconomic environments in the U.S. and Europe has dramatically improved. Two, Wayfair's margins finally stabilized last quarter, and that stabilization coupled with continued robust domestic and international growth served as justification for what had been several quarters of big investment. Investors rallied around those numbers, and bid up W stock to new highs. * 5 Reasons Stocks Are Falling Right Now Where It's Going Next: Wayfair is a big growth story. This company has differentiated itself as the leader in a secular growth online home retail market, and this market is very big. Management pegs it at $600 billion in the U.S. and Europe. Revenues were under $7 billion last year, and grew by over 40% year-over-year. Thus, there is lots of runway for Wayfair to remain a big growth company for a lot longer. Having said that, the valuation is a tough pill to swallow here, especially with profit margins still very weak. As such, I wouldn't chase this rally. But, I would buy any big dips. The Trade Desk (TTD)Why It's At All-Time Highs: Programmatic advertising leader The Trade Desk (NASDAQ:TTD) has exploded to all-time highs over the past few weeks thanks to a robust double-beat-and-raise fourth quarter earnings report which underscored that this company's growth narrative is still accelerating, and that big growth is here to stay for a lot longer.Where It's Going Next: The Trade Desk is a secular growth company powered by still accelerating tailwinds in automation and advertising. Over time, all $1 trillion worth of global ads will be transacted programmatically. That means that Trade Desk, which had under $3 billion in gross spend last year, has a huge opportunity in front of it to grow gross ad spend towards $100 billion-plus. If management successfully executes on that opportunity, TTD stock will head significantly higher in a long term window. Etsy (ETSY)Why It's At All-Time Highs: Shares of Etsy (NASDAQ:ETSY) have surged to all-time highs over the past few weeks thanks to robust holiday numbers which were strong across the board, including robust community, sales, margin, and profit growth. Investors cheered those results, and bid up ETSY stock to fresh highs. * 3 Earnings Reports to Watch Next Week Where It's Going Next: Etsy is a big growth company with strong growth drivers in e-commerce. But, there's lots of competition here, from Amazon (NASDAQ:AMZN), eBay (NASDAQ:EBAY), and others. To be sure, Etsy has held off that competition, but that's because Etsy dominates a niche of the market, meaning that growth won't remain big forever. Eventually, it will tap out, and so will margins. That may happen sooner than most expect, and at over 60x forward earnings, a slowdown could be catastrophic for ETSY stock. Chegg (CHGG)Why It's At All-Time Highs: Digital education platform Chegg (NASDAQ:CHGG) has roared to all-time highs on the back of a strong Q4 earnings report which included robust subscriber, revenue, and profit growth, as well as a healthy first quarter and fiscal 2019 guide.Where It's Going Next: CHGG stock will head higher from here. Why? Because the company is the unchallenged leader in the digital education market, and that market is far bigger than what the company is currently penetrating. At scale, Chegg will transform into a must-have digital education tool for all high school and college students. It is only a fraction of that today. As such, big growth is here stay for a lot longer. Such big growth is also accompanied by big margins. The combination of big growth and big margins will inevitably power CHGG stock higher in the long run.As of this writing, Luke Lango was long SHOP, TTD, AMZN, EBAY, and CHGG.Compare Brokers The post 7 Growth Stocks Racing to All-Time Highs appeared first on InvestorPlace.
Launched only in 2015, Shoptalk has quickly turned into one of the largest and most important retail conferences in the US. More than 8,000 people attended the conference in Las Vegas this week, as 270 speakers discussed technology, social media and changing consumer behavior, among other topics. Shopify (SHOP) — a fast rising player in e-commerce — was at the event as e-commerce software continues to grow in importance, as it can help even the smallest mom and pop store sell across the country. RBC analyst Ross MacMillan attended the conference and caught up with Shopify team. The analyst remains optimistic on SHOP stock, reiterating an Outperform rating and $230 price target, which implies nearly 22% upside from current levels. Shopify Plus is the company’s answer to large online businesses wanting to use their service. The Shopify Plus platform is able to handle more than 10,000 orders per minute with a 99.98% uptime, making sure the even the biggest brands can handle peak demand. MacMillan says, “investments into the Plus platform continue at a rapid pace...focused on configuration/ customization for more sophisticated merchants (such as the Flow workflow management environment) as well as international/ multi-site capabilities.” Furthermore, the analyst believes “new product developments will include Product Center, a lightweight product information management (PIM) solution for multi-store environments.” MacMillan say, “this, coupled with multi-currency support and multi-site inventory, will strengthen Plus’ position for international and multi-brand deployments,” opening the door to a larger market. As the product is being more heavily geared to international deployments, Shopify is positioning itself to sell in foreign markets. MacMillan says, “Plus now has sales people on the ground in UK and Australia…[with] more countries [expected] in 2019.” However, the analyst thinks these investments may not even matter, saying that “organic interest in Plus remains high” for Plus, with “inbound inquiries from DVNBs (digital native vertical brands), traditional retail and CPG [outweighing] outbound marketing efforts."MacMillan is optimistic on Shopify not only from a “new merchant wins” perspective, but because he continues “to hear of a steady flow of brands moving from other platforms to Shopify Plus.” He says, “notable were examples from the low-end of the Salesforce Commerce Cloud/ Demandware base...and from Magent…[while] there also appears to be a growing effort for CPG companies to execute on their D2C strategies and we heard of some examples where Shopify Plus is becoming the platform of choice.”As always, we like to give credit where credit is due. According to TipRanks, MacMillan has a yearly average return of 30.5% and an 86% success rate. MacMillan has an average return of 94.1% when recommending Shopify and is ranked 2 out of 5,228 analysts. Overall, the analyst community is optimistic on Shop stock. TipRanks analysis of 21 analyst ratings on the stock shows a consensus Moderate Buy rating, with 15 analysts recommending Buy and six recommending Hold. However, the average price target among these analysts stands at $191.47, suggesting the stock is neither oversold nor overbought. (Get TipRanks' free stock analysis report on SHOP) Read more on SHOP: * Wall Street Second Best Analyst Pulls the Trigger on Shopify (SHOP) Stock * Top Analyst Boosts Price Target for Shopify (SHOP) Stock; Here’s Why More recent articles from Smarter Analyst: * General Electric's (GE) "Teach-In" Boosts Investor Confidence; RBC Weighs in on the Stock * Cannabis Stock Tilray (TLRY) Goes Negative for the Year; Here's Why * Will New Products Help Spur Fitbit (FIT) Stock Growth? * Is General Electric (GE) Stock Still a Buy for the Long-Term?
Investors in Shopify (NYSE:SHOP) have enjoyed the stock's strong move up so far in 2019. On Mar. 4, the Shopify stock price saw an all-time high of $194.80.Source: Shopify via FlickrNow that the earnings season is behind us, let's look at what may be next for SHOP stock, which has been a darling of Wall Street since its IPO in 2015. Strong FundamentalsOn Feb. 12, the company came out with strong Q4 2018 earnings that beat Wall Street consensus on both the top and bottom line. Shopify reported revenues of $343.86 million, beating the estimate by about 5%. SHOP's projected annual revenue growth is over 30%. Shopify's year-on-year operating income was also up 72%.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Dow Jones Stocks to Buy In a nutshell, Shopify sells out-of-the-box ecommerce solutions. The company's growth comes from two segments, "Merchant Solutions" and "Subscription Solutions." Merchant Solutions which provide tools merchants to serve their customers better and sell more. Subscription Solutions which offer merchants of all scales monthly recurring subscription plans that range from under $10 to over $2,000.Shopify Plus, the premium version of Shopify, has now over 5,300 merchants, including names like Johnson & Johnson (NYSE:JNJ), Unilever (NYSE: UL), and the Obama Foundation.A quarter of the company's monthly recurring revenues comes from Shopify Plus merchants. Because the company's gross margins are about 50%, analysts highlight the importance of the monthly recurring revenue (MRR) for the future strength of the company.After the earnings call, investors cheered many of Shopify's competitive advantages, such as the balance sheet without any debt and over $2 billion in cash and marketable securities. This cash strength would help Shopify pursue acquisition opportunities globally as it makes its platform easier to use and to bring specific talent or technology to the company.For example, in 2016, it acquired Kit CRM and Boltmade, two privately-held small companies. Later in June 2018 it bought Return Magic, a mobile app that specialized on making it easier for customers to return products.During the conference call, CEO Tobi Lutke stressed that the company would continue to innovate and deliver products as well as services for both the merchants and their customers. International Expansion and Shopify StockManagement is also looking at international expansion, especially in non-English-speaking countries, as the next strategic area of growth.Shopify recently launched its payment gateway, Shopify Payments, in Germany, making bank account transfers possible. Several of Canada's provinces are using Shopify as their cannabis website storefront, giving Shopify even more global visibility.In its efforts to expand beyond the core English-speaking countries, including the USA, Canada, the UK and Australia, the company has recently made the Shopify website available in six other languages: French, German, Japanese, Italian, Brazilian Portuguese, and Spanish.In other words, Shopify is an attractive company with excellent growth prospects in cloud-based e-commerce business, both in North America and globally. However, investors also need to be aware of some question marks regarding the company. What Could Derail SHOP Stock?On the opposing side of the coin are the nervous investors and short-sellers who are looking for any excuse to short Shopify stock. Shopify critics were not entirely impressed with the recent earnings call which showed a slowing down of growth on a relative basis.Shopify has yet to post profits for investors. However, the non-profitability of Shopify does not yet seem to concern investors who continue to believe the long-term story of Shopify. Yet if it cannot keep up with the aggressive growth assumptions, then shareholders may become more concerned with the lack of profits and its margins and the stock price could suffer.The bears further point out that SHOP stock's hefty valuations would be hit in case of an economic slowdown. If the broader market go not go up as rapidly as they over the past decade, then the momentum in high-flying stocks like SHOP would slow down, too.Then there is the constant threat of Amazon (NASDAQ:AMZN) taking a bite off Shopify's revenues, which would affect the Shopify stock price negatively.Finally, many investors are quite concerned about the various reports by short seller Citron Research which regards Shopify's business model and marketing claims a "get-rich-quick-scheme." The Bottom Line on Shopify StockSince the record Christmas Eve decline in the broader markets, Shopify stock has had impressive comeback. Therefore a slight pullback toward the higher $150's level might still occur in SHOP stock in the next few weeks.SHOP is a growth as well as a speculative stock. Therefore, in the coming weeks, I expect its price to be a battleground between investors and traders. While long-term investors would like to see Shopify go over the $200 level, traders are likely to keep the range between $205 and $155.If you already own SHOP stock, you might want to hold your position. However, within the parameters of your portfolio allocation and risk/return profile, you may consider placing a stop loss at about 5-7% below the current price point.Well-performing stocks tend to keep on winning, and the recent strength of Shopify stock might be a good indication that within three or four years, investors who buy SHOP are likely to be rewarded handsomely.As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks That Should Be Worried About a Data Dividend * 5 Cheap ETFs Worth Considering * 7 Cheap Stocks Under $5 That Could Soar Compare Brokers The post Take Profits Now and Buy Shopify Stock on Its Next Big Dip appeared first on InvestorPlace.
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