rtmark
LearnBonds.com

Shopify Surges to Record Highs Even as Wish IPO Sags

shopify

Shopify stock surged to a record high yesterday as Amazon remains 9% below its 52-week highs that it hit earlier this year. Investors also gave a thumbs down to the IPO of eCommerce company Wish and it closed below its issue price on the first day of listing.

Shopify

Shopify stock surged 7.8% yesterday and closed at $1,157.31 and made a new record high. The stock has almost tripled this year and is up 68 times since its IPO in 2015. Shopify’s year-to-date returns are much ahead of the 75% rise that Amazon has seen. Etsy stock has risen over 300% so far in 2020.

eCommerce companies have seen a spike in revenues this year as more consumers have embraced online shopping. eCommerce stocks are part of the so-called stay-at-home basket of stocks that have soared this year. Netflix, Zoom Video Communications, and Peloton are among the other stay-at-home stocks that have spiked this year.

Wish IPO disappoints

Meanwhile, it is not that markets have embraced all eCommerce companies. Yesterday, Wish that’s owned by ContextLogic listed and priced its IPO at $24—at the top end of its guidance. While most IPOs have done well this year and last week DoorDash and Airbnb delivered stellar gains on the listing day, Wish lost 16.5% and closed at $20.05. It was however trading almost 5% higher in pre markets today.

Shopify makes new record high

Incidentally, while Shopify made a new record high yesterday, Wish, with a much lower valuation failed to close above its IPO price. Wish’s growth rates have been very modest and volatile as compared to the high growth rates that Shopify is witnessing.

Shopify stock is valued at an LTM (last-12 months) price to sales multiple of 54x. In contrast, Wish trades at a 2019 price to sales multiples of only about 7.1x. In the first nine months of 2020, Wish reported only a 32% rise in revenues which hardly beats the revenue growth of Amazon despite Wish’s revenue base being much smaller than that of Amazon.

KeyBanc is bullish on Shopify

Yesterday, KeyBanc issued a bullish note on Shopify and expects that it would charge a new eCommerce fee to its clients like Amazon. “Shopify has quietly expanded Shop Pay from a checkout wallet to a consumer-facing Shop App that offers package tracking and recommended product browsing,” said KeyBanc Capital Markets analyst Josh Beck pointing to over 60 million buyers for Shop Pay.

He also added, “While monetization details are limited at this early juncture, we see a future where Shopify could earn a referral fee (for example, Amazon generally charges a 15% take rate for many of Shopify’s merchant categories). Assuming Shop App is about 20% of total payment volume an incremental take rate would imply a $100 million revenue opportunity.”

Analyst target price

According to the consensus estimates compiled by CNN, Shopify has a median price target of $1,150 which is similar to its current prices. Its highest price target of $1,400 is a 21% premium over current prices while its lowest price target of $550 is over 52% lower than the current price.

That said, Wall Street analysts have generally been behind the curve when it comes to growth companies. Tesla has generally traded above its consensus price target since October 2019 while NIO has also traded above its mean price target over the last six months. Most of the time analysts have raised their target prices after the stocks have already run-up.

You can buy Shopify stock through any of the reputed online stockbrokers. Alternatively, if you wish to trade derivatives, we also have reviewed a list of derivative brokers you can consider.

Trusted & Regulated Stock & CFD Brokers

Rating

What we like

  • 0% Fees on Stocks
  • 5000+ Stocks, ETFs and other Markets
  • Accepts Paypal Deposits

Min Deposit

$200

Charge per Trade

Zero Commission on real stocks

Rating

64 traders signed up today

Visit Now

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Available Assets

  • Total Number of Stocks & Shares5000+
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • DAX Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
  • Paypall
  • Skrill
  • Neteller

What we like

  • 0% Commission
  • Trade Stocks Via CFDs
  • Authorized & regulated by the FCA

Min Deposit

$100

Charge per Trade

Zero Commission

Rating

Visit Now

76.4% of retail investor accounts lose money when trading CFDs with this provider.

Available Assets

  • Total Number of Stocks & Shares+2000
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Future
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • Dax Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire transfer
  • Credit Cards
  • Bank Account
  • Paypal
  • Skrill
Users should remember that all trading carries risks and users should only invest in regulated firms. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.

Mohit Oberoi is a freelance finance writer based in India. he has completed his MBA with finance as majors and also holds a CFA charter. He has over 13 years of experience in financial markets. He has been writing extensively on global markets for the last six years and has written over 6,500 articles. He mainly covers metals, electric vehicles, asset managers, and other macroeconomic news. He also loves writing on personal finance and topics related to valuation.