Heady Days for Share Price
Will new tools, Facebook deal send Shopify stock higher?
Shopify Inc. (NYSE: SHOP) posted another record-high close Thursday after unveiling new features for merchants, including a business account that offers a more flexible alternative to traditional banking.
The company showcased its new offerings at its online Reunite conference, replacing Shopify’s annual Unite meeting in Toronto for partners and developers.
Shopify’s e-commerce platform offers retailers a suite of services, including payments, marketing, shipping and customer engagement tools, that are designed to simplify online activity for small merchants.
Wall Street certainly appeared to like what it was hearing. Shopify shares established a record-high closing price of $802.35 on Thursday.
The share price has more than tripled since it hit its 52week low of $262.17 a year ago.
In May alone, Shopify’s stock price has soared about 27% and the company, which went public in May 2015, is now the largest in Canada after moving ahead of the Royal Bank of Canada in market value. Shopify has a market capitalisation of about $95.1 billion.
Shopify beat first-quarter earnings expectations earlier this month when it reported revenue of $470 million, a 47% increase over its revenue of $320.5 million for the first quarter of 2019. Last year’s figure was a 50% increase over 2018’s first-quarter revenue.
The company had earnings per share of $0.19 cents, compared with analysts’ estimates of a loss of $0.18 per share.
The consensus among analysts covering the stock is that Shopify is a Hold. The average price target is $733.00, with a high estimate of $860.00 and a low of $360.00.
But anyone who got in on Shopify’s IPO stock in 2015 and held the shares is certainly sitting pretty. Five years ago, Shopify priced its IPO at $17 per share. Shopify had initially targeted the $12 to $14 range but robust demand landed Shopify IPO shares at $17.
The company raised $131 million by selling 7.7 million shares. An investment of $1,000 in the Shopify IPO would be worth today more than $45,000. Of course, many investors did very well over the same time period. The SPDR S&P 500 (NYSE: SPY) total return over that stretch is 53.8%.