shopify stock forecast 2022
Published on: January 28 2023 by pipiads
Table of Contents About shopify stock forecast 2022
- Shopify is about 10% of total U.S. e-commerce capital
- Shopify Stock Will Make Millionaires | SHOP Stock Explained
- Is It Time To Sell Shopify Stock? Shop Stock Price
- Shopify Analysis - $SHOP STOCK PRICE PREDICTION & TARGETS
- Is Shopify a BUY? Earnings Revealed | $SHOP stock
- Is It Time To Buy Shopify Stock? Shop Stock Price
Shopify is about 10% of total U.S. e-commerce capital
gmv up 11- was better than expected, smaller than a expected operating loss. are we in the midst of a turn here? what's going on? well, look, I think, started the sort of macro level. I think the macro Tailwinds of e-commerce and just digitalization in general remain very strong long term. Global e-commerce sits at about 5 trillion today. it'll be about 7 trillion by 2025 and I think Shopify is certainly one of the most dominant players in that space and and the dominant player for independent retail. um, but right now it's clear- I mean consumers favorite brands are almost entirely on Shopify, whether it's Galaxia or fiori or aloe yoga. in terms of the quarter and the results, you know, I think during the third quarter, more Merchants are using more of our Solutions than ever before, but the role that we are playing in these Merchants businesses I think is far is very different than most typical software providers. I mentioned on the call that our Merchant solution attached rate is 2.14. what that means is more Merchants are taking more of our Solutions, payments, Capital fulfillment, uh, more services like audiences. so I think we had a really good quarter in terms of revenue. revenue was 1.4 billion up 22. on a three-year kagger that's about 52, but equally important I think right now especially is is this operation discipline. adjusted gross profit was like 681 million dollars, that's up nearly 11 um, and and on a three-year basis, adjusted gross profit kagger was like 46. we're also decelerating year-on-year operating expense growth and we have about five billion dollars of cash in the balance sheet. I was going to ask you about that. the sequential decline in expected Opex- I mean Opex- is obviously a huge topic of discussion this morning. how much can you cut? how disciplined can you be? uh, before you start cutting into muscle, well, look, we have. we were not raised in Venture Capital. Shopify has been a company that has always been very thoughtful when it came to managing expenses. nearly all of our growth- pre-delivered, pre-delivered acquisition- has been organic and funded by redeploying gross profits uh into the business. the cash we've raised externally has been used strategically to, to accelerate the product roadmap, um, and so we can continue to invest in things like buyer building, buyer relationships, Going Global, uh, the logistiks piece of it. but we think we can do both. we think we can be really good stewards of capital and good capital allocators and at the same time grow this business. Shopify right now is about 10 of total e-commerce in the US we have small businesses, starting with us, growing really large. that's sort of the figs and and Albert's story. but we also have very large companies like glossier and Spanx and Mattel, who are coming to shop, that run the entirety of their, of their Enterprise, uh, Converse, and so we have these different sort of Pathways into Shopify. but I think the more exciting part of the story is really Merchant solutions- that we can play a much larger role in simply making it easier to sell across different services. yeah, Harley, a bit of a macro question for you, given the fact that you are working with so many different businesses of so many different sizes across the country. we had Carol tomay from UPS on earlier in the week and one of the things she toked about, especially as we get to this peak shipping and holiday season, is this idea of it's a little bit of a return to pre-pandemic Norms in terms of things like consumer behavior and how they're shopping. but it's also the fact that we are seeing this economic slowdown. what are you seeing through your different business segments and how do you expect that to translate in terms of economic activity into next year? yeah, I mean, look, Carol is a friend and UPS is a great partner, Shopify. year over year consumer spending uh lives up about 8.2 percent last September, according to US Census Bureau. month to month, that spending remains fairly steady. I think the key is going to be. in the same way that Merchants during the pandemic had to reset how they did business and where they sold, the same thing goes now. if one partikular channel is not working well, shift to a different channel. the reason you see us tok about things like audiences, which an hour ago we just announced a new integration with Google on audiences- but our Integrations with with Instagram, or Integrations with tik tok and Spotify, um and snap, is we want to make it really easy for merchants to find more customers, regardless of the climate, and by providing with more versatility it means that we future-proof their business. but, um, I I think we'll see a a good holiday season. it'll remains to be seen how strong it's going to be- but our Merchants- now we have millions of them- are getting ready to sell.
Shopify Stock Will Make Millionaires | SHOP Stock Explained
what's up, guys? it's Rob here, and today we need to tok about Shopify, or shop stok, because this stok has been so oversold over the past year. it's gotten down to ridiculous valuations while all the all the while maintaining incredible fundamentals of the underlying company. we're going to break down what's happened with it over the past 52 weeks just about, and I'm going to explain why I actually just bought some earlier today, because this is such an incredible company and it also has a pretty cool mission. right, they're doing something pretty cool. so Shopify- for those of you who haven't heard of it- is a company that enables small businesses to engage in e-commerce. they also enable large businesses to engage in e-commerce, but they're essentially an Amazon competitor. they don't directly sell things themselves online like Amazon, but instead they provide a platform where people can create their own online stores and then sell things as a small business as a large business. anyone who wants can easily create a Shopify store and start selling stuff. I've done it. it takes maybe, you know, a couple of hours, with the layout they give you, to fully set up the thing. if you have the images and branding that you need, then you just throw it all together and boom, you have an online store. so it's a pretty cool service that they offer and it does directly compete with Amazon because it allows individuals to start selling products on their own websites and collecting their own revenues rather than going through Amazon. so it is an alternative to that and a lot of people don't like the fact that Amazon seems to be coming a big Monopoly, but Shopify is certainly helping out by helping to diffuse the e-commerce space and allow more people to engage in it, instead of it just being one big Monopoly like Amazon. they help with shipping and all kinds of stuff. so really cool business model. I've used them. they're very easy to use and a pretty- uh, you know- potentially profitable business when times are good, right, if you're selling the right product. so, with all that said, I'm going to break down what's happened with their stok price, because you can see it's Fallen dramatikally over the past year, as all things have. right is, we are in a recession right now and Shopify stok has suffered quite a bit now. over the past 50-ish weeks, just about you can see- we've moved down from highs to lows- down about 83 percent- and this is just going to give you an idea of the potential gains that could be seen if we did end up making back some of those losses. if we just got to where we were at the beginning of 2022, that would be about a 388 percent gain on Shopify stok. if you bought at its current price and if we moved back to the all-time highs which we've fallen from within a year, that would be a 522 percent gain. now, I'm not saying that's going to happen instantly. right, we are in the midst of a recession. a lot of stoks have been moving down and be, you know, for good reason. right, the fed's been really crushing us with these interest rate hikes. but Shopify, I believe, does have the potential to rise back to these numbers within the next couple of years, because they've been experiencing incredible growth even while we've been in recession. I'm going to break this down for you. we have, in 2022 to in the first half of 2022, they've reported 2.5 billion dollars in Revenue. now, if you annualize that number, since that's just the first half, assuming they'll do the same in the second half as they did in the first half, that's about five billion dollars in Revenue in 2022.. now, that's impressive because in 2021, their total revenue was 4.6 billion dollars, so they actually managed to grow their revenue in a year when the entire economy, when GDP, was shrinking. so very impressive stuff. now it's not as impressive as the growth that they saw going from 2020 to 2021.. from those years they saw 57 growth and going from 2021 to 2022, they only saw about eight percent growth. but eight percent growth for a stok that's actually, instead of growing eight percent moved down 80 percent is a really good buying opportunity in my opinion, right? I think that when you see that kind of stuff, that's a disparity between what the price potentially should be and what the price is, oftentimes induced by fear and a couple of negative catalysts that we're going to discuss now. before we break into that, I did want to show you that e-commerce, which Shopify mainly engages in, is still a rapidly growing area. these are the total revenue for retail e-commerce Revenue in the United States 2017 to 2022, with forecasts to 2025. so 2022, it's looking like we'll have about 875 billion dollars worth of e-commerce Revenue in the United States. that number is projected to grow to 1 300 billion, so 1.3 trillion dollars, in 2025. we're absolutely expecting e-commerce from retail to explode over the next couple of years and Shopify is one of the main enablers of that. if you look at the gross merchandise volume for Shopify in 2021, they had 175 billion. so about 20ish percent of what we saw in uh 2021 was from Shopify and that's a 40 increase- 47 percent increase from 2020 to 2021. another very impressive thing about Shopify I'll break down real quick. their market cap has fallen dramatikally over the past couple of months as their stok price has been crushed. they're currently sitting at a 36 billion dollar market cap. now what's really impressive about that is that they have cash reserves totaling 7.77 billion dollars. so essentially, when you're buying into this company with a 36 billion dollar market cap, 7.7 billion dollars of that you're just buying into cash. so you can almost just wipe off 7.7 billion dollars worth of their market cap in terms of what their business has going for it, because they've just got that cash sitting in their accounts and they can do whatever they want with that cash. obviously, they could spend it. they could try to use it to improve the business, do more research and engage in new retail opportunities. but while you're buying it, currently it's looking like they've got about 7.7 billion dollars in cash, and so that just makes the stok look even cheaper from a market cap perspective. so, especially regarding the size of this company, the fact that they are commanding 175 billion dollars worth of gross merchandise volume- so basically, how much people were able to sell with their services in 2021? that's absolutely massive and we should be seeing that number grow in 2022, despite the fact that we're in a recession. so really impressive stuff. now, if you're worried that they're just engaged in e-commerce, uh, that's mainly what they've been focusing on in the past, but they're also starting to Target physical retailers, after admitting that they've been overly aggressive in the e-commerce space. so one of the reasons why they did end up sinking over the past couple of months was, Unfortunately, they saw- well, fortunately, they saw- massive growth during the pandemic. everyone started moving online, shopping online, and we ended up seeing that growth slowed down. but Shopify had made some big bets on e-commerce. they hired a ton of new employees, some of which they ended up laying off after realizing that those growth trajectories weren't going to sustain themselves entirely. once again, they were seeing 57 growth over 47 growth year over year, and then they saw eight percent growth about this year- right if we're projecting forward what they could do for the rest of the year. so there have been some slowdowns, obviously, and that has partly led into the declines that they've seen, but I think that the declines have been greatly over exaggerated, partly because the fed's been so hawkish and has been raising interest rates. the fact that we've been in recession and pretty much every stok has been getting sold off, I think, seriously leads into the fact that this one has been getting sold off quite dramatikally. I think that we could see some real big gains in the near future future if the overall economy starts to tu.
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Is It Time To Sell Shopify Stock? Shop Stock Price
welcome back to another episode. today we're gonna take a closer look at the e-commerce giant, Shopify, stok tiker shop. unfortunately, we can see in the past year the stok is down roughly 76 percent year-to-date. the stok is down roughly 72.8. on the bright side, there was some great news released on November 29th of 2022 that Shopify Merchants set new Black Friday- Cyber Monday record with 7.5 billion dollars in sales. that is a 19 increase in sales from 6.3 billion during last year's Black Friday and Cyber Monday weekend and it kind of just shows the overall strength that there still is in the consumer Market. but on today's episode, what I want to do is take a closer look at some reasons to be bearish in the stok. I personally am a shareholder of Shopify and I am bullish in this company, but I do believe it's always important to understand the other side of the investment process right, so kind of understand the bearish side. so let's take a closer look in today's episode. I do want to thank the Motley Fool For sponsoring this video and make sure to check out fullcom Jose to get the top 10 stoks to buy right now. alright. so, starting off, the first thing I want to mention is just the overall growth in the employees this company saw in 2021. that really caused a lot of expenses to grow dramatikally. uh, I mean, I think this is a huge, huge kind of red flag at the moment, or yellow flag that a lot of bears are seeing in their kind of thesis. for example, if we take a closer look in the past three years how shopify's stok based compensation has grown dramatikally over the past few quarters, we can see this overall trend, especially in the past quarter alone. the other thing is this is kind of also we're also seeing kind of cash flow from operations dwindling in the trolling 12 months. we can see in the trolling 12 months shopify's cash flow from operations is down dramatikally. we did see a huge growth in shopify's employee on an annual basis. we can see 2022 was up dramatikally. company has kind of taken a nice amount of steps here. we know in July 26 of 2022 Shopify mentioned that they are laying off roughly 10 of their employees during that time frame and I know in the past few quarters, in the past few months, that's probably has increased a nice amount. but obviously this is a bigger company than it was before. so even if they are laying off employees, they still have to kind of pay on Severance paychecks and kind of other liabilities that happen with the laying off of employees here in the states and and globally as well. uh, and overall again we're seeing kind of still the highness in stok based compensation. I don't expect that to change anytime soon, but in the upcoming quarters as employees numbers start to dwindle uh and kind of these Severance paychecks have been given out throughout the time frame that they are given, I would expect stok based compensation to some extent to stop growing, hopefully, or kind of stay more in, uh, the flat line or very, very minimal growth on the kind of quarterly, quarterly basis. uh, so this is probably my first red flag right now. again, the company has made some kind of changes to fight that. now take a closer look at the second red flag for Shopify: some of the reasons to maybe stay away from the stok. again, like I mentioned, I am a shareholder. I'm super bullish in this company, but I always think it's important to understand the other side. so if you are enjoying the episode, make sure to hit the thumbs up, as it does help me grow my overall audience. if you want to support a little bit more, make sure subscribe using my Link at 4.com Jose. finally, if you want to learn about the semiconductor Market- that is my bread and butter- I have a weekly podcast on the different channel. the link is above. episode 4 was just released. episode 5 was just recorded, so make sure to subscribe. the link should be here, so make sure to click that out. uh, so for I want to say the second red flag I want to say is the overall Acquisitions and kind of big moves this company is doing uh to kind of grow their Solutions. so there's both a good and the bad right. if you're trying to grow your Solutions, what happens? you're most likely either investing in some form of engineering team or investing in some team to kind of grow that solution, or you're making Acquisitions. one of the kind of solutions they're really trying to grow is the kind of fulfillment Network and most recently they did acquire a company called deliver and the acquisition finished off on July 8th of 2022 during the earnings call. right, I want to say the Fulfillment Market is probably a low margin market and it's one that has heavily uh, that needs heavily invested, and we can see during their most recent earnings they kind of mentioned for the Outlook because of the larger mix of their merchant Solutions contributing to overall revenue and the dilutive impact of the liver. gross profit dollar growth will meaningfully Trail Revenue growth. we also see here in their presentation they do mention that overall this kind of acquisition of the liver is causing some form of dilute of two gross margins. so this is a very, very kind of expensive acquisition and this kind of Market or solution that they're trying to enter the Fulfillment network is going to be an expensive one for them. so a lot of investors are wondering if this is the right move for Shopify. I personally do believe it's smart for them- them to kind of continue to be more of, uh, the full solution for the e-commerce world and obviously that includes the net um, the kind of distribution side. so I personally enjoy it, but I can definitely see why certain investors might not like it. um, overall we can see the company is trying to kind of reduce a lot of their expenses. uh, we can see for the full year outlook they did mention that stok compensation was going to be 575 million. their previous Outlook was 750 million. so they are seeing a decrease in their Capital expenditures: 125 million. previous Outlook was 200 million. so we can see the company is attempting to kind of pull back on those expenses and we're definitely seeing that with just the guidance alone. the final Outlook I do want to mention for Shopify that I have, or the final red flag I, it's just the overall company's balance sheet. it's still very strong in my opinion, with roughly 4.9 billion dollars in cash and roughly 1 billion dollars in total long term debt. but I do want to say it's kind of dwindling especially. look at that cash and short-term investment. from a quarter ago it was roughly seven billion dollars. a little bit lower than that, if anything, uh, but just in the past few in the past quarter it has dropped down to roughly five billion dollars again. it wouldn't be too much of a red flag if we were in the mark in a normal Market environment. but remember, we are seeing things like consumer spending maybe decreasing on the fortunate side, right with this kind of Black Friday and Cyber Monday record. it kind of shows otherwise, but we're definitely kind of expecting com some form of consumer pressure on the spending. the other thing is the overall kind of macroeconomics. we're seeing from higher interest rates, from the overall foreign exchange rates as well, that this kind of decreasement in the balance it can continue. so again, if this was more of a normal environment, I wouldn't think too much of this, but because of all the headwinds that are impacting Shopify in the overall macroeconomics, I do believe that the cash in short-term Investments could kind of continue to decrease over time. so this is something investors should keep an eye out. so let me know what are some of the reasons you might be bearish for Shopify that I might have missed again. like I mentioned, I am bullish in this company. I personally believe it has the opportunity to provide great returns in the overall e-commerce market, and maybe my next video might actually be three reasons why to buy Shopify. let me know if that's a video you guys want to see on the comments below. take care.
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Shopify Analysis - $SHOP STOCK PRICE PREDICTION & TARGETS
in this video we are going to be analyzing Shopify, tiker shop. so to get straight into it, it's up to well, two and a half percent. today did kind of Gap up a lot further. it's starting to pull back, um, but we are seeing a lot to tok about the stok today. so what are we looking at going forward? so, as always, we'll just go into the key time, oh, the key longer term charts we're getting. this way we're always going to get our strongest tiknical levels. again, this is tiknical analysis. um, again, fundamentals are always obviously going to be the key driver. if you see some big news come out about shop, you probably want to be playing the direction, uh, on the room of it. and then, yeah, once we get- whether whether it's a confirmation or a denial again, then you tendency to start reversing the way it came. so, obviously, fundamentals will always provide the bigger moves, but tiknicals can also provide some good opportunities. so what are we looking at from a tiknical perspective? so, on the Lefty, every six month on the right, we have a one-year chart. now what we can see: at 41.80, we have our first division on the one year, but also at 36.50, we have our first division on the sixth month. so what did we see happen? and again, here we are really seeing what rate- basically kind of a perfect example of what we do in every single one of these analysis videos that we perform- you came to test your first deviation and you pull back. now you kind of held the other one as a support and now we're pushing back up. what does this tell us? so it tells us, obviously the pullback that provided the first trade opportunity. now we're holding this level as a support. what does that tell us? again, most likely this level is holding and we are going to continue higher again. the confirmation is always going to be a close above that, 42 dollars. but now again, if you want to get in with some smaller size, now, if I was looking to trade it, probably a bit of small size as it added in now, and then a proper size once we get that confirmation. and then where would my targets be going even further? so if we break that 42, then 48 is going to be that first Target. that's our second deviation on the sixth month. if we break that, we're then looking at 59. breaking through. there would be seventy dollars, then going on to 78 and our final levels at 113 and 148.. now, obviously, we're at 37. now are we going to hit 150? now, this isn't saying we're going to hit 150, because obviously that is very far off from where we are now. but what this does do is keep you prepared if any big news comes out, maybe the next earnings, or we just see something- uh, maybe something happens to their CEO or something- and this stok moves absolutely crazy. let's say, it gaps up 100, for example. again, then you have levels. you'll be paying attention to the 60 and the 70 dollars and so that's why we provide you so many levels. yes, if we wanted to, we could give you the 47 or the 48, the 42, the 36 and- our closest support, 25 as levels, because that's the only thing you'd have to focus on for the time being. but again, better to be prepared than underprepared and obviously these videos aren't going to say we predict it to go up, we predict it to go down. I mean, we may occasionally give you that Insight, but again, we don't like to have a bias on the way that you're trading because again, me as a creator doesn't know you as a viewer and whether, whether you're bullish or bearish on it. so we provide you levels to both sides and then get end. then you can trade to these levels depending on your personal bias. so again, these are our resistances up here. now, what a support. So at 25 we have our statistikal mean and then at coming down to 1360, that's where we have our first actual support, which is going to be our six month first deviation. okay, lower, we have another statistikal mean at six dollars and 22 cents and a final support, um support at two dollars and ten cents. so now here we are, we're at 37. again, a lot of resistances to the upside, a lot of supports. the downside again. I don't care what your bias is on this stok. that's why we provide you both directions as of right now. I would be more bullish on it. so my opinion would be paying more attention to the upside targets. but again, if markets continue week or for any reason, uh, we just start to push down again, I'm not gonna be a fool. I know you're never going to be right 100 on Direction. so I'm prepared if we start falling to the downside. I know if we start breaking below 36.50, I'm no longer long bonus. if we get a close below there, I'm gonna flip a bit more short buys on it. so again, that's why these levels are key because, yes, I need targets to the upside, but I also need to know when I'm going to be wrong. below 36.50 I'm most likely wrong. that's when I'll look to get out. now, if we push all the way down to 24.75 again, this will perform oh kind of 25. what will this do? the first time we hit it, that provides me a long bias bounce location. now, if we bounce off it, come back to retest it. we break below. come back to test it as a resistance. now, again, that makes me even more short buys. I'm going to be shot by this until at least 14. so again, these levels and kind of the levels we give you are just levels to be paying attention, to be using them as support resistance. if you come to them again, we don't know if it's going to go up, we don't know if it's going to go down. no one knows what's going to happen. but it's just being prepared in which direction it goes and having levels to support either direction. so you're prepared to trade either direction. anyway, I hope you enjoyed the breakdown on shop. if you did, why not drop a like And subscribe? and actually we're going to be starting a new series on this channel actually today and that's going to be going through the funding process for futures Trader, so if you want to watch that out as well, go and check my channel out. otherwise, hope to see you next one and that's it, peace.
Is Shopify a BUY? Earnings Revealed | $SHOP stock
all right guys. shopify just announced earnings and revenue. it missed on both. now, remember, i don't focus too much in the short term, but for those of you who like to hear about it, they were expected to make two cents per share. they lost three cents per share. they're expected to do 1.33 billion in revenue. they did 1.3 billion in revenue. now the reason it doesn't matter to me in the short run is i'm a value investor. i like to sit there and look at the long term of a company. companies can miss here and there, quarter to quarter. we don't want them to hit every single time. if they are hitting every single time, they're probably manipulating earnings and revenue in some fashion. so we don't want to see that. we want to see: is the trend still going? it's kind of like in school: you're going to have a few bad grades here and there. the point is you don't just all of a sudden, because you have one bad grade, you're dropping out of school and you're a miserable failure. no, you regroup, you go back and refocus. that is the key to investing. now the thing about shopify is: let's go take a look of their stok price in our everything money software. it hit a high of 176, in the last year a low of 30 and now it's currently at 35 a share. so that's pretty tough. so again, if you're new to this channel, if you're new to this video, i'm paul, i'm a value investor. that guy over there, that's mo, he's a day trader and value investor. we're here to tok about the long-term approach of looking at companies. we want to teach a process in which you love when stoks go down. we literally get sad. when stoks are up, you'll literally just go: uh, now that's easy to say you're going to do, but when stoks start to go down, do you have the ability to go buy more? so the question you also have to ask yourself is: is shopify a good deal? now you see 176, you see 30 and a current price is 35. you think yourself: this thing is on sale down 80. pump the brakes. just because something is lower does not mean it's a good deal. if you don't think that, let me give you an example. if i had my house, and let's say my house in normal markets were 300 000.. but i want to sit there and fool somebody. i'm going to ask a million and then a week later i'm like: you know what? i'm going to drop the price of 600 000.. you, the smart investor, would say: but wait, it's still only a 300 000 house. why should i pay 600 000? just because it's down from a million? it's still only a 300 000 house. same applies to stoks. we want you to view companies and stok prices as different things. love the company, hate the stok price that you don't buy the stok- that's the key here. so let's go use our eight pillar analysis to go evaluate shopify right now and again. if you have our software of your member of it, please follow along if you're part of the community. if not, go to everythingmoneycom. you can learn to sign up there. so some of the things i want to look at before we look at our eight pillars. guys, this is a 44 billion dollar company that has a nine price to sales ratio. now, when it comes to companies that are losing money or software, i like to compare these things. so shopify has a nine times price to sales ratio. let's go look at a company like microsoft, which is, i believe, overpriced and it's currently at a 10.67 price of sales ratio. so i look at that saying, okay, microsoft's overpriced shopify is almost at their same price of sales ratio. microsoft's gross profit is 68.7 percent. shopify's is 53. i'm not feeling it on the shopify just from right then and there, but let's go look at our eight pillars tab to see where the company falls in terms of all of its metrics. all right, big numbers here, guys: pe, five-year pe and five-year price of free cash flow are nosebleed, absolute nosebleed. and of course, the story is well, shopify is growing. they're growing like crazy. great. you know what else they're doing. they're diluting the heck out of you. they have 40 more shares outstanding today than they did five years ago. that's a lot, guys. now, debt: i'm not worried about this debt number. this is our long-term liabilities divided by the five-year average free cash flow. why am i not worried about this number? because they're barely making cash flow. their five year average free class was 145 million dollars. they're probably gonna have a. really, to me, that makes their debt about 1.3 billion on 4.8 billion dollars in revenue. okay, that doesn't seem bad. so this is an example of where using the eight pillars on a young company won't tell you the real story. i'm not saying this debt level is okay, but it doesn't alarm me. these are the big, alarming numbers right here. these are the ones that scare the bejesus out of me. now they're growing revenue, they're growing on income and they're growing on cash flow. that's awesome, but you still have to sit there and say: what should i pay for this company? well, this is exactly why we created the stok analyzer tool. but before we get there and put our numbers in to decide what we're going to pay for the company, just because shopify may be overpriced doesn't mean you can't make money from it, and mo will tell you how to do that using charts. guys, this incredible fall on shopify. so here's a great opportunity. this is what i call dog stok and why you would put a tracker share on something, and tracker share is buying one share. so you see it in your account every day. instead of getting lost on your watch list of 50 socks, you could pull this out and see it every day. here's, here's the big fall. they've fallen from that 180 number down to what 35 now. but my pay attention to right here is the stokhastik on the bottom. it just keeps going sideways on the bottom, on the bottom. eventually, eventually, if this company stiks around- which i probably think they will- this number will just start this. this stokhastik will just start to creep and creep and creep and the price will just start creeping and creeping. eventually it'll start moving up and you'll be the first one in and you'll be able to squeeze a little bit more profit out of there. that's why i like this one so much. but for right now, if you want to be active with it, you can come over here to a swing trading chart and see what you can do. there's a lot of moving averages that you're sitting right under, right on top of, so if you get some type of move over this 100 day, you'll have some type of nice run. if you can get below the 50 and the 25, you'll have a nice rundown. so this is giving you a lot of options long term- short from a swing trading perspective, long from a swing trading perspective. there's different ways that you can approach this one. all right. so now we've looked at that. the stok analyzer tool is what we created, because every investment's a present value of all future cash flow. so we don't know the future, so our- our job is to make assumptions about the future, put in the stok analyzer tool, determine what to pay for the company. so let's go right there. so first off, guys. you got to pick number of years of analysis: 1 to 20.. i always have it start standard on 10, because i do think shopify will be around for a long time. okay, it is a very good service. it puts a lot of people immediately right there to be able to get their online stores running. all right now, revenue growth guys. 10 years ago, about eight years ago- they did 18 million dollars in revenue. last year, they did the 14 point: 4.4 billion. this is probably not very sustainable, okay. so i want you to exert some caution here, because that's the key to everything in investing: you want to be cautious and then buy for less than that value and it sounds boring, but this is how the best investors of all time have done it. so would you rather make money or be excited? i'd rather make my excitement for making my money. so here's what i do: revenue growth: i'm going to call it 8, 11 and 14.. if you think i'm conservative on that one, let's look at what 14 revenue growth for the next 10 years would take shopify too. about 16 billion dollars in revenue, almost quadrupling their revenue. all right, that doesn't seem crazy.
Is It Time To Buy Shopify Stock? Shop Stock Price
welcome back to another episode. yesterday, I did three reasons to be bearish on Shopify and in that episode I mentioned that I'm actually a shareholder of Shopify, but I always think it's important to understand the bearish side of an investment thesis. on today's episode, I actually went through the opposite. I want to take a closer look at three reasons to be bullish on this e-commerce giant. so let's get started. I do want to thank the Motley Fool For sponsoring this video and make sure to check out fullcom Jose to get the top 10 stoks to buy right now. I want to say right, Shopify has had great news. recently, November 29th of 2022, shopified Merchants set new Black Friday, Cyber Monday record with 7.5 billion in sales. this is a 19 year-over-year increase in sales from 6.3 billion during last year. if we take a closer look on the constant currency basis, it was actually up 21, so there's a few things that I can see from here. obviously, we like to see that growth in the kind of sales. this is a company that's very dependent to some extent of kind of transactions, so more transactions the better for Shopify as well. the other thing I do want to mention is we can see in on a constant currency basis. there's not a huge drop, only two percent, two percentage points. so this tells me a lot of the sales happen here in North America or someplace where the strong US dollar doesn't have too much impact. so now let's jump into the first reason to be bullish on Shopify to me. I just want to say the overall balance sheet. this is something I mentioned on the bearish video about how it's deteriorating, but at the same time I do believe in the bullish sense it still has a strong balance sheet. we can see in most recent quarter the company reported 4.9 billion dollars in cash and short-term Investments. if we take a closer look at that total long-term debt, the company has roughly 900 million dollars. we are seeing the company cut back on expenses dramatikally. we can see their previous outlook for stok based compensation for the full year of 2022 was 750 million dollars. now it's 575 million. it's insane how fast a company can kind of change that Outlook and how much money they can save when they really need to Capital expenditures also reduce. previous Outlook was 200 million, now it's 125 million dollars. so we can see the overall Financial balance sheet. the company is very, very stable and the company is also doing a lot to kind of reduce those expenses as well in the long term of things. so I do want to say that's probably one of my first bullish points for Shopify. the next bullish point I want to say is just the Innovation this company is doing and kind of seeing, especially in the past year. but if you guys are enjoying the episode, make sure to hit the thumbs up, as it does help me grow my overall audience. if you want to support a little bit more, make sure to subscribe using my Link at foilcom, Jose. finally, if you are interested in the semiconductor Market, I do a weekly podcast on a new channel. make sure to check that out, make sure to subscribe. episode 4 was just released, episode 5 was only recorded and a lot of great news about the semiconductor space there. so let's jump back into here to bullish Point number two. I did mention right, huge kind of innovation in my opinion. I mean, in just the past year alone we've seen kind of their increasing Solutions in reaching new buyers and traffic efficiently. they've added new ad tik Solutions. I think that's super impressive, especially since they are kind of this e-commerce solution um place right. so they have shop, Shopify collabs and Shopify audiences where they kind of team up with huge, huge ad tik players to make sure they're advertising to the great to to the best person. right outside of that, they're also increasing their supply chain complexity, increasing the solutions. here they've recently acquired the liver and in kind of introducing Shopify promise, which is combating Amazon and their one to two day delivery. they are overall improving their Shopify fulfillment Network as well. even though this is, in my opinion, a kind of expensive investment that they're going to, I do believe it can overall help the solutions that Shopify goes and kind of creates. one of the great perks of Shopify is this is pretty much a One-Stop shop. you don't need to go find any other Solutions if you want to open up an e-commerce store and not just even online right, just brick and mortar. in general as well, the Shopify network is just a One-Stop shop. so they need to keep improving everything from fulfillment to kind of even audience, like we're seeing here with Shopify collabs and kind of the ad tik business and obviously even the Financial Solutions with Shopify pay, Shopify capital and Shopify balance. I mean we can see in the past year alone they kind of did surfix expansion to companies like Walmart, Facebook shops, tiktok, alipay, Spotify, jdcom. uh, here we can see, in 2022, even things like YouTube platform. right, if I am a content creator and I want to sell through my Shopify store, I can automatikally link it to this video, and I think that's insane. the other thing is the company is also going offline line with things like Shopify point on System, point on sales go, and that's something that's driving strong growth right now. so it started off as an online, online solution for e-commerce, but now they have numerous, numerous kind of solutions for just the brick and mortar, which I do believe has strong, strong, uh potential for continued growth. all this is kind of also not just here in North America. they are also expanding internationally. so, in my opinion, I do believe the innovations that they are bringing from the kind of collaborations with huge social platforms like YouTube, like tiktok, like Facebook, and the overall kind of solutions they are increasing from shop fulfillment to the financial side and everything in between, like audience and attik. I think this has huge, huge tailwind. and now this is gonna enter me to point number three, and I think it's just the overall Market here in the e-commerce side. even though we did see that e-commerce grew dramatikally in the during the covet times it did pull back and that's kind of the weakness we are seeing, especially with numerous headwinds in this space. but we can see e-commerce seems to be bouncy back. it's still kind of above the estimated trend line that they have and we can see retail e-commerce sales worldwide is expected to continue to grow for the next few years. so even if Shopify doesn't gain market share, the overall Market is growing and I do believe that's a huge, huge Tailwind for Shopify. uh, so all of this with Shopify sitting at an extremely attractive Price Right year to date, the stok is down roughly 72 percent, less than a 50 billion dollar market cap. I'm not here trying to play- uh, play- guessing games, but I wouldn't. I wouldn't be surprised that in the next three to four or five years this company is over a hundred billion dollar market cap if it does continue to show the strength in this space- obviously one of the riskiest competition coming in. but in my opinion right now, with Shopify doing all these Integrations with great platforms, it's going to continue to be the leader in this space, at least for the foreseeable future. so I hope you guys enjoy these three reasons to be bullish on Shopify. let me know in the comments below. if I missed one, take care. have a good day and don't forget to check out that semiconductor podcast. I promise it's a lot of great information in that space.