Taking an Analytical Look at Shopify’s Stock and Company Growth
Joining one of the biggest eCommerce platforms to ever exist is promising for store owners and investors alike. When choosing Shopify, whether as a storefront or as a stock option, it’s reasonable to assess if Shopify possesses the longevity necessary to fulfill our eCommerce needs. One way to measure this potential for success is to look towards stocks and Shopify’s metrics of growth. Among the current pandemic outbreak, Shopify’s services have continued soaring as consumers choose online-facing storefronts over brick-and-mortar options. After achieving incredible growth in 2019, Shopify is getting ready to do it again this year. Let’s take a look at their stock presence, share price, on-going improvements, and the future of Shopify financially!
Shopify’s Presence in the Stock Realm
Shopify is currently a huge eCommerce competitor to eBay (EBAY), Amazon (AMZN), and other similar digital marketplaces. The eCommerce platform also challenges BigCommerce, as well as larger corporations that have recently focused on digital selling, like Facebook (FB) and its Marketplace features. What sets Shopify apart from these alternate companies? Part of it is Shopify’s incredible presence in the stock market, the stock of which was quickly trending towards $1,000+ (£773+) prices as per Q1 2020, and successfully jumped to $1,049 (£801) as of July 30th following their Q2 2020 report .
IBD Composite Rating, which combines key metrics into a singular score, gives Shopify a 98 out of 99. This near-perfect score speaks towards Shopify’s ability to continuously outperform not only competitors, but also itself, year-in and year-out! Its EPS Rating is a 76 out of 99, and its SMR Rating a C (on a scale of A to E). Together, these scores demonstrate Shopify’s stock earnings, company health, sales growth, profit margins, and return on equity. While not perfect, this younger company, started a mere decade ago, is showing incredible progression towards ideal scores. In Q12020 alone, Shopify earnings soared by 217% coming in at $0.19 (£0.15) per share. Their overall value of goods sold on the platform grew by 45-47%, exceeding all previous expectations by totaling $17.4 (£13.46) billion. These numbers go hand-in-hand with their 47% rise in revenue and 45% increase in gross merchandise volume. You’re reading all of that right – Shopify’s Q1 consisted of selling more expensive goods at a higher rate and making more money doing it.
The recent release of Shopify’s second-quarter financial results proves even more promising. Their Q2 2020 report states that gross merchandise volume has grown by $30 (£23) billion, a 119% increase compared to Q1 2019, and is up 73% from the quarter of 2020 before. One of their biggest financial highlights of Q2 2020 is a total revenue of $714.3 (£545.4) million – an incredible 97% increase over Q2 2019. While the S&P 500 has fallen by 4% this year, Shopify stock was up 105% as per Q1 2020, and they’re coming close to hitting Shopify’s all-time high prices as of Q2 2020. Don’t expect Shopify to look downwards any time soon either; their forecasted trend lines are only looking up.
Shopify’s Newest Features and Releases
Assessing Shopify’s success can be done by taking a look at the improvements they’re making to their platform. New features and releases show reinvestment into the eCommerce site, and demonstrate potential for growth. As of late, Shopify launched a mobile shopping app called Shop that allows customers to discover local stores, track online orders, and even receive recommended products from top brands based on their purchases. Shopify recently partnered with Walmart too, fueling their heightened stock price. The two have joined forces to allow the selling of merchant products on Walmart’s online platform, bolstering both companies’ sales. More of Shopify’s recent changes, like the Shopify Balance Account, Shopify Balance Card, Shop Pay Installments, and more, were debuted during Shopify’s Reunite, an annual conference that was held digitally this year due to coronavirus. If you missed it, you can catch up on all the virtual conference’s key announcements here!
The Effect of Current Events on the Future
It’s hard to say for sure how COVID-19 will impact the earnings of any company, and some forecasts are predicting a slight loss in share price simply due to the global state of the economy. For instance, Shopify reported that many merchants downgraded from Shopify Plus to more-affordable plans through March and April. However, analysts are suggesting that share price could also grossly increase should sales grow as expected – which is 37%, up to $2.16 (£1.67) billion for the year. As of May, Shopify communicated that despite coronavirus, its growth was looking to be “largely positive,” and they were right. As per their quarterly financial report released on July 29th, Shopify’s platform grew 71% in Q2 of 2020 compared to Q1, and many of those aforementioned merchants have since re-upgraded their Shopify plans. “The world is changing fast,” says Shopify CEO Tobi Lütke. “Entrepreneurship has never been more important.”
If you’re one of the businesses gearing up to join Shopify’s rise to the top, Radiant can help. Our team of elite Shopify specialists creates entirely custom storefronts, tailored to your individual brand. We’re strong believers that every company deserves to stand out, and through our design, development, content creation, and on-going priority support, you’re sure to be number one. Contact us today to get started on improving your Shopify store!
