#7 - Shopify (NYSE:SHOP)
For many years, when investors combined the words e-commerce with growth stocks the answer was always Amazon (NASDAQ: AMZN). And the tech giant remains an investable stock for many reasons. However, at the moment, Shopify (NYSE: SHOP) is likely to be the better bet.
Investors are notoriously a “what have you done for me lately” bunch. To that end, SHOP stock is up 25% in 2021; Amazon is up just 3%. Let me reiterate, this isn’t to say AMZN isn’t a quality investment. However, if you’re a growth-minded investor, Shopify is looking like a better bet.
The key to the company’s recent success has been its ability to grab new clients. In fact, the company, which has largely been known for catering to small- and medium-sized businesses is now making inroads with larger businesses. And the company’s software now allows all their customers to provide in-store and curbside pickup that will be essential ingredients to any business as the economy reopens.
About Shopify
Shopify Inc, a commerce company, provides a commerce platform and services in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, Australia, China, and Latin America. The company's platform enables merchants to displays, manages, markets, and sells its products through various sales channels, including web and mobile storefronts, physical retail locations, pop-up shops, social media storefronts, native mobile apps, buy buttons, and marketplaces; and enables to manage products and inventory, process orders and payments, fulfill and ship orders, new buyers and build customer relationships, source products, leverage analytics and reporting, manage cash, payments and transactions, and access financing.
Read More - Current Price
- $106.96
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 24 Buy Ratings, 16 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $94.95 (11.2% Downside)
Growth stocks tend to be expensive by market standards. This may mean they are trading at a high price-to-earnings (P/E) ratio if the company is profitable. Or it could have a high price-to-sales (P/S) ratio if it is not yet profitable. By itself, this doesn’t mean you should stay away from the stock. If the company meets or exceeds its growth expectations, the stock is likely to climb much higher.
However, if the company fails to meet expectations, the stock may decline sharply. Investors can see this in the tech sector where many growth stocks will take a sharp move downward if earnings and/or revenue do not meet analysts’ expectations.
Growth stocks should not be thought of as speculative investments. They have a place in virtually any investor’s portfolio. Risk-averse investors may choose to allocate less to growth stocks.
Alternately, they may opt to invest in growth stocks through an exchange-traded fund (ETF) that specializes in growth stocks. The fund’s prospectus will outline the fund’s investment objective and its historical performance in relation to the broader market.
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