SHOP - Shopify Is Expensive For Many Great Reasons
2024-02-17 12:00:00 ET
Summary
- SHOP continues to boast multiple growth drivers, as consumer spending/platform adoption remains robust despite the uncertain macroeconomic outlook and sustained price hikes thus far.
- Combined with the management's optimistic forward guidance, it is apparent that the SaaS company's positive profit margins are here to stay.
- SHOP's omni-channel offerings are likely to trigger further top/bottom line tailwinds, as the global e-commerce market growth is expected to accelerate against retail expansion through 2026.
- These have resulted in the stock's highly optimistic rally and inflated forward valuations, well outperforming the wider market.
- Moving forward, SHOP may slowly grow into premium valuations, for so long that it continues to deliver high growth, expanding profit margins, and increased market share.
We previously covered Shopify (SHOP) in November 2023, discussing its excellent FQ3'23 results, with the robust consumer spending contributing to its expanded GMVs and GPVs.
With multiple e-commerce and online payment platforms still highly resilient despite the uncertain macroeconomic outlook, it was unsurprising that the SHOP stock had also rallied over optimistically and forward valuations inflated, resulting in our reiterated Hold rating then....
Shopify Is Expensive For Many Great Reasons