|Bid||60.66 x 1400|
|Ask||60.67 x 900|
|Day's Range||60.53 - 60.73|
|52 Week Range||50.80 - 64.84|
|Beta (3Y Monthly)||0.43|
|PE Ratio (TTM)||23.96|
|Forward Dividend & Yield||1.83 (3.06%)|
|1y Target Est||70.00|
European stocks clocked their fifth straight week of gains on Friday with investors buying into the oil and gas and banking sectors, and Novo Nordisk rising after U.S. approval of its oral diabetes drug. Investors also sought refuge in the so-called defensive sectors such as utilities, real-estate and food and beverages ahead of a week packed with economic data. The United Nations (UN) general assembly will also provide clues on the fallout from attacks on Saudi oil facilities last weekend and indications of a potential meeting between the presidents of Iran and the United States.
(Bloomberg) -- The executives tasked with introducing Seventh Generation’s line of eco-friendly laundry detergents, dish soaps and cleaners to Southeast Asia faced a dilemma earlier this year. If the Unilever NV unit proceeded with the planned product launch before enough recycled plastic could be found for packaging, it could undercut sustainability goals tied to 20% of employee bonuses. Picking a non-recycled material could cost them all a chunk of money. “If you don’t have access to recycled resins, then we just won’t launch,” Seventh Generation Chief Executive Officer Joey Bergstein said the company decided at the time. His team eventually found suitable material from the region’s fledgling recycling infrastructure, and Seventh Generation hit store shelves there without lowering standards—or bonuses. The search paid off for Unilever, too, with the same supplies of recycled resins going into the packaging of the European consumer giant’s other brands in Southeast Asia.Most large companies now set sustainability goals, but few impose consequences on employees who fail to meet them. Around 500 corporations worldwide tie executive pay to environmental, social or governance goals, according to data compiled by Bloomberg. Not all of these are related to climate impact—diversity and safety are more prevalent than environment targets among this group.That’s beginning to change. “It’s is coming up more and more, but five years ago this wasn’t part of the conversation,” said Seymour Burchman, a managing director at Semler Brossy, a consultant that advises on compensation plans. With companies creating better data around environmental impact and risks, he said, the case for linking compensation gets stronger. “The board can’t ignore it.”The employers that most often link compensation to environmental impact aren’t crunchy consumer brands like Seventh Generation but gritty miners. Extractive industries need to measure environmental impact to get licenses required to operate in local communities, and Burchman said that incentive pay has been an effective way for miners to improve these results.Cameco Corp. links 40% of annual bonuses to safety, environment and community measures. Vale SA started linking emission reductions to annual bonuses in 2018. Rio Tinto Plc said in April it was considering how to link greenhouse gas cuts to short-term incentive plans. BHP Group—the world's largest miner—said Tuesday it will increase the amount of short-term incentives CEO Andrew Mackenzie has tied to carbon emissions reductions and climate metrics in 2020 from 4% currently. As more companies reckon with their carbon footprints and face pressure to embrace renewable energy, links between climate-related targets and compensation are spreading. General Motors Co. CEO Mary Barra had seven sustainability objectives last year, including reaching 200,000 electric vehicle sales in the U.S. GM’s proxy statement denoted each one with a little green leaf, alongside other traditional financial goals for CEO pay like revenue, dividends and share repurchases. There are other executives at the Detroit automaker with sustainability goals included in their compensation, although a GM spokeswoman didn’t say how far these targets extend down the line.Climate goals for executive pay are more common in Europe, where companies like Novozymes A/S, the Copenhagen-based maker of industrial enzymes, gives each employee his or her own incentives for meeting financial, social and environmental targets. Food and beverage maker Danone SA bases about 10% of CEO Emmanuel Faber’s pay on meeting climate commitments and creating a sustainable supply chain.Sustainability is increasingly creeping into traditional financial incentives for companies — and even their suppliers. Walmart, for example, has pledged to cut a gigaton of greenhouse gases out of its business by 2030, extending all the way into its supply chain. Earlier this year, in an effort to spur suppliers to do better, Walmart offered better financial terms to anyone who delivered on green goals. Walmart specifically links diversity and culture to 15% of executive incentive pay and 10% of pay for associates, but doesn’t break out environmental goals in its proxy. In the credit markets, nearly $70 billion of green- and sustainability-linked loans were issued this year, according to data compiled by Bloomberg. The loans let companies lower the cost of their debt if they meet specific sustainability targets. At Seventh Generation, the entire workforce sees pay change along with company-wide sustainability metrics. That puts the unit on the far end of adoption, which makes sense for an environmentally-minded consumer brand. “When you bake it into the incentive system people really feel compelled to go after it,” said Bergstein, the chief executive.Meeting goals on packaging and greenhouse-gas reduction prompted the launch of an ultra concentrated laundry detergent in 2018. The detergent weighs less, which the company claims will cut emissions from shipping by about 70%.Scientists working for Seventh Generation, however, have concluded that 92% of the company’s greenhouse-gas footprint stems from people washing and drying clothes at home—something very difficult for executives to change. Working with manufacturers to design washing machines that are more efficient didn’t seem like it would address that problem fast enough. So the company took an unorthodox approach.Seventh Generation set a target that 100 U.S. cities would need to pledge to shift to clean energy by 2030. If they didn’t, employees would lose out on incentive pay. Bergstein will admit that it sounds crazy: “What kind of control do we have over 100 cities across America to make that kind of commitment?” he said. “But we looked at each other and said if we’re really serious about cleaning up the energy grid, then we’ve got to do something like this.”Seventh Generation spent $1 million on lobbying efforts and worked with the Sierra Club and other groups to sway local officials. It worked — and its 160 employees got to keep their bonuses. “It would have been a lot easier to take that $1 million and spend it elsewhere,” Bergstein said. “But it really keeps your feet to the fire.”This story is part of Covering Climate Now, a global collaboration of more than 250 news outlets to highlight climate change.To contact the author of this story: Emily Chasan in New York at firstname.lastname@example.orgTo contact the editor responsible for this story: Aaron Rutkoff at email@example.com, Tim QuinsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
If there was any doubt to the power of Shopify (NYSE:SHOP) and its e-commerce business, SHOP stock removed it all. At a time when we have so many questions about the viability of the domestic and global economies, SHOP represents the bright beacon of hope. Since the start of the year, shares have jumped an astonishing 146%.Source: Beyond The Scene / Shutterstock.com Even more remarkable, Shopify stock had slowed down noticeably last year. Once the dust settled on a volatile end to 2018, shares of the upstart e-commerce firm were only up 36%. That gave ammunition to the bears -- including yours truly -- to criticize the company's business model. At the time, it also seemed like the bubble was bursting, given that SHOP stock skyrocketed 133% in 2017.Of course, I was dead wrong about Shopify stock. Part of the reason why shares have done so remarkably well in 2019 was due to the fundamentals, the very thing that bears have criticized. For example, in the company's most recent second-quarter earnings report, management knocked it out of the park.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn terms of per-share profitability, SHOP delivered earnings of 14 cents per share. That figure easily surpassed analysts' consensus call for earnings-per-share of 2 cents. On the revenue front, Shopify rang up $362 million, besting consensus estimates for $350 million. Not surprisingly, SHOP stock flew substantially higher on the news.Additionally, the granularity was also very positive in Q2. For instance, gross merchandise volume (GMV) hit $13.8 billion, shooting Merchant Solutions revenue up 56% year-over-year to $153 million. Also, the number of merchants is over 800,000 (although Shopify didn't specify in their Q2 summary). * 10 Recession-Resistant Services Stocks to Buy All in all, that's tremendous news for Shopify stock, right? Not so fast. SHOP Stock Is a Deceptively Attractive InvestmentOn the surface, it seems you can't lose with Shopify stock. For one thing, it's levered to the broader e-commerce revolution that drove up names like Amazon (NASDAQ:AMZN). More importantly, they're demonstrating that more merchants are boarding the Shopify train.For the bulls, the below chart represents one of many reasons why they're excited about SHOP stock. Whether you're talking about the price of shares or corporate revenue or GMV and merchant count, several metrics are exercising the positive end of the vertical scale. Click to EnlargeBut while it's crucial to have the right numbers moving higher, the reality is that context matters. And this is where some of the optimistic narrative for SHOP stock dies down for me.While Wall Street toasted Shopify stock for the underlying company producing another strong earnings report, I was left wondering what they were talking about. Principally, I don't see the same sustainable growth story that has tickled the suits covering the e-commerce firm.Let's break down what we actually have here. Over the trailing year since Q2 2019, Shopify merchants have generated GMV of $49.7 billion. Although I don't have the actual merchant figure, I'm going to conservatively estimate that they have 870,000 stores. That gives me an average annual GMV per merchant of $57,126.That's probably a bit on the high end. For instance, in 2014, annual GMV per merchant was $26,061. A year later, this metric increased to $31,399. Between 2016 and 2017, GMV per merchant averaged just under $42,000. Last year, the stat registered $50,122. Click to EnlargeMy question is, what business can survive on gross sales of $50,000 a year? In the U.S., the median household income is $56,516.You're better off working for a living, which means the rally in SHOP stock is probably not sustainable. Follow the LogicOf course, calculating averages is merely an arithmetic exercise. In reality, we know that merchants can't live off of $50,000 a year. Just off the top of my head, I can think of overhead expenses and inventory outlays. These and other costs and expenses can really start eating into profits in a hurry. * 7 Hot Penny Stocks to Consider Now Logically, then, we know that Shopify gets the bulk of its GMVs from its top-tier, high-level merchants. We're talking about the names that management always brags about in their quarterly summaries, such as Unilever (NYSE:UL), Kylie Cosmetics, Allbirds, and MVMT.What about the other 869,996 merchants? Well, most of them will fail because they have to. Mathematically, if the lion's share of GMVs are produced by a handful of elite organizations, that leaves very little for everybody else. And that means, revenue sources like Merchant Solutions are threatened because they could drop off as the merchants do.Plus, if we have a recession, it's game over. There's no way that merchants making far less than $50,000 a year can compete with the scale of big-box retailers like Walmart (NYSE:WMT) or Target (NYSE:TGT).Don't get me wrong: SHOP stock can get interesting at a lower valuation. But right now, it has simply gotten well ahead of itself.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 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post We Need to Get Serious About the Sustainability of Shopify Stock's Growth appeared first on InvestorPlace.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Naspers Ltd.’s newly listed internet unit received an enthusiastic early response from investors, soaring on its trading debut to close a valuation discount to its biggest investment, Chinese tech giant Tencent Holdings Ltd.Prosus NV, as the new Amsterdam-listed company is known, jumped as much as 32% in early trading to value the business at about 125 billion euros ($138 billion). The group’s 31% stake in WeChat creator Tencent is worth about $131 billion, the result of a timely investment made almost two decades ago.The investor reaction is an early vindication of the strategy masterminded by Naspers Chief Executive Officer Bob van Dijk, who took the helm of the Cape Town-based company five years ago. His plan to carve out Prosus into a new listing in Amsterdam was designed to attract a more global investor base and realize more value, while weakening the group’s dominance over the Johannesburg stock exchange.The move to Euronext is “to facilitate our next phase of growth,” Van Dijk said in an interview with Bloomberg TV just after the market opened. Prosus’s classified-ads business is the largest in the world, while the group also sees fast expansion in internet payments, food delivery and online trading in second-hand goods, he said.While the discount to Tencent was all but wiped out, the firm is still trading below the sum of its parts when you add other assets, including shareholdings in Russia’s Mail.Ru Group Ltd. and Delivery Hero SE of Germany. Van Dijk’s next challenge will be to generate higher returns from those investments and prove that Prosus isn’t merely a proxy for holding Tencent stock.“Our next step will be to bed down and invest in our core business units,” Chief Financial Officer Basil Sgourdos said by phone.Shares in Prosus -- a Latin word meaning ‘forwards’ -- declined slightly after the early surge. The value as of 11:28 a.m. in Amsterdam was 121 billion euros, making it the third-largest publicly traded company in the Netherlands, behind Royal Dutch Shell Plc and Unilever NV. Its market value rivals that of Europe’s biggest tech company, Germany’s SAP SE.Naspers is retaining a 73% stake in Prosus, and will keep hold of South African businesses including the newspapers that form the basis of the company’s origins a century ago. Its stock rose in Johannesburg, trading 5.4% higher as of 11:28 a.m. local time.“Naspers has been looking to unlock value in the steep discount applied to its Tencent holding and the successful listing of Prosus today has certainly gone some way to achieving that target,” said Neil Campling, an analyst at Mirabaud Securities. “Prosus is not only the Tencent holding though.”(Updates with CFO comment in sixth paragraph.)\--With assistance from Swetha Gopinath, Anna Edwards, Matthew Miller and Kit Rees.To contact the reporters on this story: Loni Prinsloo in Johannesburg at firstname.lastname@example.org;John Bowker in Johannesburg at email@example.comTo contact the editors responsible for this story: Thomas Pfeiffer at firstname.lastname@example.org, Jennifer RyanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Moody's Investors Service ("Moody's") today affirmed WEI Sales LLC's ("WEI") Corporate Family Rating (CFR) at Ba3 and its Probability of Default Rating at Ba3-PD. At the same time Moody's affirmed the company's first lien term loan due 2025 at B1.
Armed with gloves, rubber boots and a rake, "Mangrove Warrior" Willer Gualva, 68, comes to Freedom Island in the Philippines almost every day to stop it being engulfed by trash. No one lives on the island, yet each morning its shores are covered in garbage, much of it single-use sachets of shampoo, toothpaste, detergent and coffee that are carried out to sea by the rivers of overcrowded Manila. "We collect mostly plastics here and the number one type are sachets," said Gualva, one of 17 people employed by the environment agency to help preserve the island and its forest.
(Bloomberg Opinion) -- Wall Street was a very conservative place politically when I started working in the capital markets in 1999, but it seems to have lurched to the left lately. It’s not only that many of the people who work there have become more liberal, but more importantly, left-leaning behavior by publicly traded companies is being rewarded by the stock market.The decision by the Business Roundtable, which is an organization led by JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, to explicitly state that the purpose of a publicly traded company is social responsibility and not creating value for shareholders is just the latest example of this lurch to the left. For decades, most public companies have chosen to remain politically neutral. That remained the case even after the Citizens United Supreme Court decision on campaign finance in 2010 that held that the free speech clause of the First Amendment prohibits the government from restricting independent expenditures for political communications by corporations. Most expected the Citizens United decision to result in conservative political speech, but it has been quite the opposite. Ben and Jerry’s, a unit of Unilever Plc, recently launched a flavor of ice cream designed specifically to support Bernie Sanders’s presidential campaign.Nike Inc.’s shares are up about 36% since the start of 2018, compared with 9.20% for the S&P 500 Index, despite backlash from some conservative outlets for signing controversial former National Football League quarterback Colin Kaepernick to a marketing deal and then bowing to pressure from the left and pulling its special edition sneakers featuring the “Betsy Ross Flag” that some feel was a symbol of racism. I was recently in a Nike outlet store here in Myrtle Beach, South Carolina, and it was packed with a checkout line 30 people deep in the middle of summer.The technology sector leans to the left, led by Google’s parent company Alphabet Inc. and Amazon.com Inc., whose Chief Executive Officer Jeff Bezos owns the Washington Post. Many consumers may complain about the liberal orientation of these companies, but there is not a lot they can do to avoid them. Sure, share prices of tech firms have stalled lately, but that’s more likely due to the threat of antitrust action than a reflection of their political orientation.The list of companies who have engaged in left-leaning speech, marketing or protest is getting long. The list of actions include pulling advertising from various Fox News programs, supporting the Women’s March, pulling products related to President Donald Trump from stores and banks dropping business with the certain gun makers. There have been few consequences, and no serious boycotts of these companies by conservatives, or at least none have been effective. Conservative media outlets had some fun with Procter & Gamble Co.’s $8 billion charge for Gillette, attributing it to backlash from an ad campaign asking men to “do better.” But the razor business has been bad for a while, with competitive threats coming from all sides. And more men are growing beards these days, so one is probably not related to the other.Corporate America may have declared a political orientation for strategic reasons. Companies today have more data and information than ever on their customers. What works for Nike may not work for Bass Pro Shops.Then there’s the waterfall of money that is earmarked for environment, social and governance, or ESG, investing strategies. It is the only form of active management that seems to be gathering assets even with a mixed track record when it comes to returns. The idea here is that companies engaging in socially responsible behavior should be rewarded by the stock market, but that isn’t always true. Indexing is widely considered to be a left-wing philosophy, the idea that you would invest in all companies equally, instead of trying to pick the best stocks. It has even famously been called worse than Marxism by Sanford C. Bernstein & Co. As everyone knows, index fund assets have been growing at an astronomical pace. By some estimates, passive strategies now make up 40% to 50% of all assets under management, and it shows no signs of slowing down. Even actively managed funds with great performance are losing assets.We’ve come a long way from suspender-snapping, bull and bear cufflinks and “lunch is for wimps.” Back then, the idea that you would invest your money and not seek the highest return would have seemed odd.I assume that decisions to engage in political speech are carefully considered by managements, but I still find it disconcerting. I’m from a generation that grew up believing the job of a public company was to “make money,” not “do good.” When they both align, then great, but what hasn’t changed is that people still like to see the value of their investments go up every year.To contact the author of this story: Jared Dillian at email@example.comTo contact the editor responsible for this story: Robert Burgess at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Jared Dillian is the editor and publisher of The Daily Dirtnap, investment strategist at Mauldin Economics, and the author of "Street Freak" and "All the Evil of This World." He may have a stake in the areas he writes about.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.A Spanish startup best known for delivering takeaways is betting on building a network of convenience stores to expand its business -- just as the food delivery sector eyes a wave of consolidation.Glovo, a Barcelona-based web platform used mainly for ordering food from restaurants, is rolling-out so-called dark-supermarkets -- delivery-only convenience stores -- from Tbilisi to Lisbon in an attempt to tap into growing web-based demand for groceries.The company is also focusing on delivering groceries for existing supermarket chains. In May it announced a deal with Carrefour SA to handle their deliveries in under 30 minutes in four countries, and it has similar partnerships in different countries with Walmart Inc., Auchan Holding Sadir and Kaufland Stiftung & Co KG, among others.Glovo drew preliminary interest from Uber Technologies Inc. and Deliveroo, Bloomberg reported in August. The startup is in 180 cities spread across 24 countries, according to its website.But the company is increasingly marketing itself as an "app for anything" that allows users to request a rider -- as the delivery staff, who mainly ride bicycles, are known -- to buy any product. With this function, a user can send a rider to any store to pick up a product and the price is charged directly to the user’s credit card, together with a fixed service fee.Competitors are increasingly moving into delivering groceries alongside restaurant-delivery. Uber Eats has piloted delivery goods from Nestle and Unilever, and said in July that it’s in discussions with European supermarkets to roll out a grocery delivery service. Amazon.com Inc. is growing its grocery store delivery operations in several countries including Spain, one of its first markets.Germany’s Delivery Hero SE is already offering transport of consumer items such as groceries and toiletries in 12 markets and plans to raise that number in the coming months, Chief Executive Officer Niklas Oestberg said last month.Demand for online groceries in Europe’s largest economies set to grow by about 60% between 2018 and 2023, to more than $45.1 billion, according to estimates compiled by Delta Partners, a consultancy.Unlike online grocery shoppers such as U.K.’s Ocado Group Plc, which delivers weekly purchases the following day, Glovo is targeting small baskets at speed. Such deliveries are simply the latest twist in the “anything" strategy, according to co-founder and Chief Executive Officer Oscar Pierre, a wiry 26-year-old aeronautical engineer who started the company in 2015, shortly after a short stint working for airplane manufacturer Airbus SE.“The app aims to allow users to buy whatever they need from their phone", says Pierre.Glovo’s main food-delivery competitor in Latin America, Rappi, recently received an $800 million investment from two SoftBank units, the Vision Fund and the smaller, Latin America-focused Innovation Fund. Glovo is also in talks to receive an investment from SoftBank’s Vision Fund, after raising 150 million euros in a round earlier this year.To contact the reporter on this story: Rodrigo Orihuela in Madrid at email@example.comTo contact the editors responsible for this story: Giles Turner at firstname.lastname@example.org, Stefan NicolaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Naspers Ltd. said a newly created entity containing assets including a stake in Chinese internet giant Tencent Holdings Ltd. will be valued at about $100 billion.Africa’s largest company by market value received shareholder backing last week to proceed with the listing of Prosus NV in Amsterdam next month. Alongside the Tencent stake, the new company will hold businesses from Brazil to Germany in industries such as online food delivery and classified advertising.A value of $100 billion would make only Royal Dutch Shell Plc and consumer-goods giant Unilever bigger in Amsterdam by market capitalization. The company would overtake ASML Holding NV, a semiconductor gear-maker priced at about 80 billion euros ($89 billion).Naspers opted to spin off Prosus -- in which it will keep a 73% stake -- to ease its dominance of Johannesburg’s stock exchange and help reduce a valuation gap between the Cape Town-based company and its stake in Tencent. The new group’s assets were valued at about $34 billion as of end June, Naspers said in a statement on Monday.Naspers Looks to Invest in AI as Prosus Listing ApprovedNaspers shares erased gains after the publication of the anticipated market value of Prosus, and traded 0.1% higher at 3,421.11 rand as of 11:52 a.m. in Johannesburg.The stock could gain by a further 40% to 4,800 rand, JPMorgan Chase & Co. analysts led by JP Davids said in a note published Monday. “In addition to Tencent’s outperformance, we expect the recent compression in the holding company’s discount to be sustained as it reduces its South African sovereign exposure.”Prosus had net income of about $1.4 billion for the three months through June, compared with $1.1 billion the previous year, Naspers said.JPMorgan, Goldman Sachs Group Inc. and Morgan Stanley are the main financial advisers on the Prosus listing.(Updates with Amsterdam ranking in third paragraph)\--With assistance from Joost Akkermans.To contact the reporters on this story: Loni Prinsloo in Johannesburg at email@example.com;Renee Bonorchis in Johannesburg at firstname.lastname@example.orgTo contact the editors responsible for this story: Rebecca Penty at email@example.com, John Bowker, Frank ConnellyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
A new group focused on “inclusive growth” — backed by prominent names in business and finance — is expected to launch on Friday during the Group of Seven (G7) Summit.
If you want to know who really controls Unilever PLC (LON:ULVR), then you'll have to look at the makeup of its share...
It looks like Unilever PLC (LON:ULVR) is about to go ex-dividend in the next 3 days. If you purchase the stock on or...
The company said it continues to expect full-year underlying sales growth to be in the lower half of its multi-year 3% to 5% target range and operating margin to reach 20% in 2020. Unilever's shares were down 1.1% in morning trade, compared to the broader FTSE 100 index , which was flat. Wet weather in Europe dampened ice-cream sales following two straight seasons of hot summers, while growth in India slowed again as a late monsoon season and lower food inflation weakened rural demand.
Unilever, Tesco and Nestlé are among the best prepared to capitalise on the trend for plant-based meat substitutes, according to a report from an investor group managing $5 trillion in assets. The report by the Farm Animal Investment Risk and Return (FAIRR) coalition showed 25 major retailers and manufacturers were developing strategies for sustainable protein products, recognising the risk of a strategy reliant on animal protein. Unilever, Tesco and Nestle were awarded top rankings for their work in understanding the impact and reducing risks associated with intensive animal agriculture, such as the emission of greenhouse gas.
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Unilever PLC and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
Investors in online marketplace Shopify (NYSE:SHOP), one of Canada's best tech names, have enjoyed the stock's stellar move up in 2019; so far this year, SHOP stock has soared 133%. On June 20, the Shopify stock reached an all-time high of $338.94.Source: Shopify via FlickrShopify is expected to report its second-quarter earnings on July 30. Now that SHOP's earnings are approaching, let's look at what may be next for SHOP stock, which has been a darling of Wall Street since its IPO in 2015. SHOP's Q1 Earnings and BackgroundOn Apr. 30, SHOP reported strong Q1 results that beat analysts' average estimates on both the top and bottom line, thanks to strong demand for its subscription solutions. Shopify reported revenues of $320.4 million, which was up almost 50% year-on-year. Its net loss came in at $24.2 million.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Retail Stocks to Buy for the Second Half of 2019 In a nutshell, Shopify sells out-of-the-box e-commerce solutions. The company's growth comes from two segments: "Merchant Solutions" and "Subscription Solutions."Merchant Solutions includes tools that enable merchants to serve their customers better and sell more products. Within Merchant Solutions, SHOP offers payment services, shipping services, and a working capital management tool.Subscription Solutions offer merchants of all sizes monthly recurring subscription plans that cost from under $10 to over $2,000 per month. SHOP now has over 800,000 sellers, an increase of 25% over the past year.Shopify Plus, the premium version of Shopify, has over 5,300 customers, 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. SHOP has recently launched a multi-currency feature for Shopify Plus merchants who also use Shopify Payments.During the Q1 earnings conference call, CEO Tobi Lutke stressed that SHOP would continue to innovate and launch new products and services for both merchants and their customers. Wall Street also expects the company to continue to grow via acquisitions. Shopify Stock's Global GrowthManagement has also been looking at expanding overseas, especially in non-English-speaking countries, as the company's next key growth area. In Q1, the company's overseas customer base grew, enabling its international revenue growth to accelerate.Earlier in the year, Shopify launched its payment gateway, Shopify Payments, in Germany, making bank account transfers possible there. Several of Canada's provinces have used Shopify to launch online cannabis stores, giving Shopify even more global visibility.In its efforts to expand beyond the core English-speaking countries, the company has recently made the Shopify website available in six other languages: French, German, Japanese, Italian, Brazilian Portuguese, and Spanish; the website is soon expected to be available in 11 languages.In other words, Shopify is an attractive company with excellent growth prospects in cloud-based e-commerce , both in North America and globally. However, investors also need to be aware of some question marks facing SHOP stock. Should Investors Be Concerned About the Valuation of SHOP Stock?SHOP stock bears point out that, given the high valuation of Shopify stock, the shares would be hit hard if a recession occurs. Even if the stock market does not go up as rapidly as it has over the past decade, then the momentum of high-flying names like SHOP stock will slow down, too.For example, SHOP stocks's price-sales (P/S) ratio is high enough to make value investors run for cover. Shopify stock's P/S ratio stands at about 30. To put the metric into perspective, the S&P 500's average price-sales ratio is 2.1.Another way to look at this number is to compare the company's current P/S ratio with its P/S ratios over time. Since going public, SHOP stock'a lowest and highest P/S level has respectively been 6.86 and 30.In other words, at present, its P/S ratio is at its highest level ever. That essentially means that the owners of SHOP stock are paying a lot more for Shopify stock now than they were when the P/S ratio was 6.Another way to analyze the P/S ratio is to compare it with the ratios of companies in similar sectors. The P/S ratio of Amazon (NASDAQ:AMZN) is four. Alibaba's (NASDAQ:BABA), P/S ratio stands at eight. And MercadoLibre (NASDAQ:MELI) stock's P/S is 17.Although the P/S ratio of SHOP stock is very high, investors should also remember that it is only one of many valuation metrics. Moreover, it does not take into account the profitability or costs of Shopify. What Else Could Derail SHOP Stock?SHOP bulls are happy to point out that the company's revenue growth is showing no sign of slowing down.But on the other hand, Shopify has not yet reported any profits. If SHOP cannot keep meeting the Street's aggressive growth forecasts, then the owners of SHOP stock may become more concerned about its lack of profit, and Shopify stock could drop.During Q1, SHOP launched its TV and film content division, Shopify Studios, Wall Street is debating why Shopify has decided to create such content. And in June, SHOP announced that it would be launching a fulfillment network and offer two-day shipping across 99% of the continental U.S. Analysts believe this ambitious strategy is likely to be quite costly for Shopify.Instead of focusing on profits, management wants to expand the company by launching new businesses. Therefore, those who plan to own SHOP stock over the long-term need to pay attention to the cash flows from its new ventures.Many investors have been quite concerned about the various reports by short seller Citron Research which regards Shopify's business model as a "get-rich-quick-scheme." Moreover, several analysts have recently downgraded SHOP stock in response to its stellar bull run.Finally, those investors who follow short-term technical charts will be interested to know that Shopify stock has spent a good portion of 2019 in overbought territory. It is possible that some profit-taking will negatively impact SHOP stock in the near future, possibly prior to its Q2 earnings report. The Bottom Line on Shopify StockIn a few weeks, SHOP stock is likely to release another strong quarterly report. However, SHOP stock is simply too expensive for me to hit the "buy" button on it at these levels.SHOP is a growth stock and a speculative stock. Therefore, in the coming weeks, I expect SHOP to be a battleground between investors and traders. While long-term investors would like to see Shopify stock go over the $350 level, traders are likely to keep it between $300 and $250.Those who have benefited from SHOP's 2019 gains should possibly consider taking profits as we look ahead to the next earnings report.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 on weakness 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 * 10 Stocks to Buy on College Students' Radars * 7 Retail Stocks to Buy for the Second Half of 2019 * The S&P 500's 5 Best Highest-Yielding Dividend Stocks The post Is Shopify Stock Getting Ahead of Its Fundamentals? appeared first on InvestorPlace.
Ben & Jerry's launched a new ice cream flavor with a "sweet swirl of justice." Dubbed "Justice Remix'd" it combines chocolate ice cream with cinnamon bun dough and spicy fudge brownies. The flavor was created in partnership with civil rights organization "The Advancement Project National Office." It is meant to bring greater awareness to criminal justice reform. Payne Capital Management's Courtney Dominguez joins Yahoo Finance's Zack Guzman, Kristin Myers for a scoop.