Management is currently focused on growth, and as a result, the company does not pay its shareholders a dividend.
There are 22 analysts whom have issued recent research reports, of which 15 are buy recommendations and seven are hold recommendations.
The consensus revenue estimates are $629-million (U.S.) in 2017, rising 40 per cent to $882-million (U.S.) in 2018. The Street anticipates Shopify will report positive earnings per share by 2018.
Revenue expectations have been steadily increasing. To illustrate, three months ago, the consensus revenue estimates for 2017 and 2018 were $599-million (U.S.) and $823-million (U.S.), respectively.
According to Bloomberg, the stock is trading at an enterprise value-to-sales (EV/Sales) multiple of 9 times the 2018 consensus estimate, below its peak multiple of over 11 times, but well above its valuation from a year ago, when the stock was trading at an EV/Sales multiple just under 5 times.
The average one-year target price is $93.24 U.S., implying the stock price may have 7 per cent upside potential. Individual target prices range widely, from a low of $70 U.S. (at Barclays) to a high of $105 U.S. (at CIBC World Markets and Eight Capital).
On June 13, the share price dropped 3 per cent when Jesse Hulsing, the analyst at Goldman Sachs, downgraded the stock to a ‘neutral’ recommendation from a ‘buy’. He left his target price unchanged at $96 (U.S.).
This month, analyst Suthan Sukumar from Eight Capital increased his target price to $105 (U.S.) from $100 (U.S.), and maintained his ‘buy’ recommendation.
Insider transaction activities
On June 5, four insiders trimmed their portfolio positions, selling shares in the market. Harley Finkelstein, the company’s chief operating officer, sold 2,238 shares at an average price per share of $97.1764 (U.S.). David Lennie, senior vice-president of data and analytics, sold 560 shares at an average price per share of $97.1764 (U.S.), reducing his holdings to 5,661 shares. Jean-Michel Lemieux, senior vice-president of engineering, sold 560 shares at $97.1764 (U.S.) per share, leaving a remaining portfolio balance of 20,485 shares. Lastly, Brittany Forsyth, senior vice-president of human relations, sold 560 shares at $97.1764 (U.S.) per share.
This stock has been a strong performer. Year-to-date, the share price has nearly doubled, rising 99 per cent. However, along with many other leading technology stocks, the share price has come under recent pressure and has declined 14 per cent in the past six trading days on elevated volume.
The stock price is hovering near a strong support level, close to its 50-day moving average at $114.26 (Canadian). Failing that, there is support around $100, and then around $80, near its 200-day moving average at $77.42.
On a recovery, there is initial overhead resistance around $120, and after that, around $130.
The Breakouts file is a technical analysis screen intended to identify companies that are technically breaking out. In addition, this report highlights a company’s dividend policy, analysts’ recommendations, financial forecasts, and provides a brief technical analysis for a security to provide readers with more information.
If a stock appears on the positive breakouts list, this indicates positive price momentum, and that a company may be worthwhile for investors to look at the fundamentals in order to determine if the recent price strength is warranted and will continue. If a security appears on the negative breakouts list, this indicates negative price momentum, and may be indicative of either deteriorating fundamentals or perhaps indicates a buying opportunity.
Securities screened are from the S&P/TSX composite index, the S&P/TSX Small Cap index, as well as Canadian small cap stocks outside of these indices that have a minimum market capitalization of $200-million.
A technical analysis screen does not replace fundamental analysis, but can help identify companies worth having a closer look at.
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