Shopify’s (SHOP) stock is up 20% on Aug. 6 following strong quarterly financial results, making the e-commerce company Canada’s most valuable publicly traded company once again.
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Ottawa-based Shopify had been Canada’s top stock in 2021 at the height of the Covid-19 pandemic trade. However, the company and its shares fell on hard times during the 2022 bear market and it has taken Shopify four years to regain the mantle of Canada’s most valuable public concern.
The 20% post-earnings jump gives Shopify a market capitalization of $197 billion, surpassing second place Royal Bank of Canada (RY), the country’s largest lender, which has a market value of $186 billion. SHOP stock is now trading near an all-time high of $156.39 per share.
What Tariffs?
Shopify reported second-quarter numbers that beat Wall Street forecasts across the board. The company’s sales rose 31% year-over-year. Management also provided rosy guidance, saying they anticipate revenue to grow at a “mid-to-high twenties percentage rate” year-over-year in the current quarter, which is above the 21.7% growth projected by analysts.
Importantly, Shopify also said on its earnings call with investors and analysts that it has seen little to no impacts from tariffs. “We had factored into our guidance some potential impact from tariffs, which did not materialize,” said Shopify Chief Financial Officer (CFO) Jeff Hoffmeister. SHOP stock is up 44% this year.
Is SHOP Stock a Buy?
The stock of Shopify has a consensus Moderate Buy rating among 32 Wall Street analysts. That rating is based on 21 Buy and 11 Hold recommendations issued in the last three months. The average SHOP price target of $120.68 implies 3.62% downside risk from current levels. These ratings could change after the company’s latest financial results.
