No chart analysis needed for such an overvalued stock.
Pros for SHOP: high-growth sector, profitable, tech based, backed by big funding, decent branding.
Cons for SHOP: EV ~56x revenue, limited capturable market, weak monetization scheme, low market share.
I expect Shopify stock to crash spectacularly within 1-2 years, conditioned on one of two things happening:
1. A major recession kills non-essential online consumer spending.
2. Revenue does not increase considerably to justify lofty valuation.
Without immense Xx revenue growth the fundamentals of this stock will continue to be incredibly overvalued.
Only serious potential I see in this companies current valuation is if it makes more strategic partnerships like it's deal with Walmart. The deal with Walmart has seemingly increased quarterly revenue considerably, but despite this, Shopify's monetization scheme and relatively small market share make them a ripe target for acquisition (Not at 140b valuation of course) or challenges from rivals in the tech space (Amazon).
Quick comparison to Shopifys closest rival: MercadoLibre (80B market cap).
MercadoLibre EV/R ratio: 24.5x (half of Shopify's)
MercadoLibre Revenue: 2.2B (19')
MercadoLibre 2020 estimated revenue: 3.2B
Shopify 2019 revenue: 1.5B
Shopify 2020 estimated revenue: 2.8B
Yet Mercadolibre's market capitalization is 60b less than Shopify.. Shopify as a company isn't hot garbage, but it's stock valuation sure is.
PRICE target: $400 by 3/15/2021
Pros for SHOP: high-growth sector, profitable, tech based, backed by big funding, decent branding.
Cons for SHOP: EV ~56x revenue, limited capturable market, weak monetization scheme, low market share.
I expect Shopify stock to crash spectacularly within 1-2 years, conditioned on one of two things happening:
1. A major recession kills non-essential online consumer spending.
2. Revenue does not increase considerably to justify lofty valuation.
Without immense Xx revenue growth the fundamentals of this stock will continue to be incredibly overvalued.
Only serious potential I see in this companies current valuation is if it makes more strategic partnerships like it's deal with Walmart. The deal with Walmart has seemingly increased quarterly revenue considerably, but despite this, Shopify's monetization scheme and relatively small market share make them a ripe target for acquisition (Not at 140b valuation of course) or challenges from rivals in the tech space (Amazon).
Quick comparison to Shopifys closest rival: MercadoLibre (80B market cap).
MercadoLibre EV/R ratio: 24.5x (half of Shopify's)
MercadoLibre Revenue: 2.2B (19')
MercadoLibre 2020 estimated revenue: 3.2B
Shopify 2019 revenue: 1.5B
Shopify 2020 estimated revenue: 2.8B
Yet Mercadolibre's market capitalization is 60b less than Shopify.. Shopify as a company isn't hot garbage, but it's stock valuation sure is.
PRICE target: $400 by 3/15/2021