It was hard to deny the value of Shopify (TSE:SHOP) (NYSE:SHOP) back during the pandemic, when every business that didn’t want to close its doors for an indeterminate period of time moved online. But when the restrictions died down and life got mostly back to normal, some questioned if Shopify could still offer value. The answer was a resounding yes, and Shopify gained fractionally in Thursday’s trading as we found out just how much value.
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While artificial intelligence developments gave the tech sector serious boosts in the U.S. markets, Shopify did a wonder for the Canadian market. In fact, reports note that the S&P/TSX Composite is up around 70%, which beat out the S&P 500 and the Nasdaq 100, both of which couldn’t clear 60% for the year. CIBC World Markets, meanwhile, declared that the Canadian tech market had “…the best performance globally among technology peers.” However, there are signs that Shopify likely won’t repeat its performance in 2024, with Mawer Investment Management portfolio manager Jeff Mo revealing that “One year’s dogs tend to be the next year’s stars.”
A Mixed Perspective
Meanwhile, trying to figure out Shopify’s 2024 performance isn’t exactly smooth sailing. One report declared Shopify to be “Bull of the Day,” focusing on its recently-upgraded earnings estimates and its cost cutting, particularly when it divested its logistics operations to better focus on the shopping. That should, the report notes, bolster margins and provide better value. However, it’s worth noting that ARK Invest just sold a huge quantity of Shopify stock only yesterday, a move which somewhat undercuts the “Bull of the Day” stance.
Is Shopify a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SHOP stock based on 10 Buys, 19 Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 117.58% rally in its share price over the past year, the average SHOP price target of C$97.83 per share implies 6.16% downside risk.
