What Happened to the Shopify Stock Price Today?
- Shopify (NYSE:SHOP) stock popped more than 10% on Wednesday after the e-commerce solutions provider reported very strong first-quarter 2021 numbers, topping the Street’s revenue and profit expectations.
- SHOP stock is now up 18% year-to-date, 104% over the past year, and 910% over the past three years.
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Why SHOP Stock Beat Earnings
- Shopify’s Q1 earnings report was stellar.
- Across the board, every key performance indicator (KPI) accelerated at Shopify in early 2021.
- Gross merchandise value (GMV) growth accelerated to 114%. Merchant revenue growth accelerated to 137%, paced by the big GMV growth.
- Subscription revenue growth accelerated to 71%, paced by healthy merchant growth.
- Total revenue growth accelerated to 110%. Gross margins expanded. Narrow operating losses swung to a huge operating profit.
- It was an excellent quarter and it’s no wonder SHOP stock popped in response.
Does It Matter to Shopify Stock Holders?
- The market has grown increasingly concerned that many of 2020’s biggest winners — the stocks that benefitted from stay-at-home and social distancing orders, like e-commerce stocks, digital media stocks, and work-from-home stocks — will see their red-hot growth rates cool off in 2021 as the pandemic subsides and consumer behavior normalizes.
- We are seeing this happening in digital media stocks. Pinterest (NYSE:PINS), Snap (NYSE:SNAP), and Spotify (NYSE:SPOT) all hinted at signs of slowing user growth in early 2021.
- But it’s not happening in e-commerce stocks, or with SHOP stock.
- Instead, Shopify’s growth trajectory improved in early 2021.
- This speaks to the durability of the e-commerce trend. The reality is that folks prefer to shop online, so even though they can shop in-stores again, they are mostly sticking with the online channel.
- The staying power of the e-commerce shift adds significant firepower to the Shopify growth narrative.
- Long-term, this company will turn into the technology backbone of the entire retail market.
SHOP Stock Price Forecast
- Shopify stock is a long-term winner.
- The only two things that can stop this stock in the interim is a slowing growth trajectory or an extended valuation.
- The growth trajectory isn’t slowing. It’s accelerating. No need to worry there.
- The valuation is rich. But not too rich. So long as Shopify maintains its stellar growth, SHOP stock will keep moving higher.
- We see shares pushing above $1,500 in 2021.
Shopify stock is one of the market’s best long-term growth investments. The company’s Q1 earnings report simply confirmed this reality.
But the big gains in SHOP stock have already happened. That is, shares will go higher from here … but they won’t skyrocket.
Wouldn’t it be nice to have bought SHOP stock back in 2017? Well, I told folks to do just that … and now, those who listened are sitting on 13X gains.
But now, my attention has turned to a new class of emerging technology stocks, which could be like buying Shopify back in 2017. I’ve put all these up-and-coming, next-gen tech stocks into one portfolio in my exclusive, venture-capital-style research platform, Innovation Investor.
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On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends. It’s how his Daily 10X Report has averaged up to a ridiculous 100% return across all recommendations since launching last May. Click here to see how he does it.