It was hard to deny the value of Shopify (TSE: Shop) (New York Stock Exchange: Shop) Back during the pandemic, when all businesses that didn’t want to close for an unspecified period of time moved online. But some questioned whether Shopify could still provide value when restrictions lift and life returns to near normal. The answer was a resounding yes, and Shopify made a small profit in Thursday’s trading as it became clear just how much it was worth.
While the development of artificial intelligence has given a major boost to the technology sector in the US market, Shopify has had an incredible impact on the Canadian market. In fact, according to reports, the S&P/TSX Composite Stock Index rose about 70%, outperforming the S&P 500 and Nasdaq 100, which failed to rise above 60% for the year. Meanwhile, CIBC World Markets declared Canada’s high-tech market “…the world’s best performing among its technology peers.” However, Jeff Moe, a portfolio manager at Mawer Investment Management, said, “Dogs that are successful in one year tend to be stars in the following year,” and he expects Shopify to perform similarly in 2024. There are signs that this will not happen.
Meanwhile, trying to figure out how Shopify will perform in 2024 won’t necessarily be smooth sailing. One report declared Shopify a “bull stock of the day,” highlighting recently revised revenue estimates and cost savings, especially as it sold its logistics business to focus on shopping. This should lead to wider margins and better value, the report said. However, it’s worth noting that ARK Invest just yesterday sold a large amount of Shopify stock. This is a move that somewhat undermines the “bullish stock of the day” stance.
Is Shopify a buy, sell, or hold?
Turning to Wall Street, analysts have a consensus rating for SHOP stock based on 10 buys, 19 holds, and 2 sells assigned over the past three months, as shown in the chart below. is considered a “moderate buy.” While the company’s stock price has increased 117.58% over the past year, SHOP’s average price target of CA$97.83 per share implies a downside risk of 6.16%.