Shopify stock surges 21% due to Fed rate cut, holiday season, expanding merchant base

From Nasdaq: 2024-10-09 11:37:00

Shopify’s (SHOP) shares have surged 21.1% in the past month, outperforming the sector and industry. This growth is attributed to the Fed’s 50-basis-point rate cut and the upcoming holiday season, with record sales in 2023. The expanding merchant base and enterprise clientele, along with partnerships with major companies, are driving SHOP’s growth.

Shopify’s expanding merchant base has led to a Gross Merchandise Volume surpassing $1 trillion, with Shop Pay processing $16 billion in GMV. The platform’s merchant-friendly tools and features, like Shop Pay Installments, are attracting new businesses despite economic challenges. Expanding enterprise partnerships and international footprint are further boosting SHOP’s prospects.

The Zacks Consensus Estimate for Shopify’s 2024 earnings is $1.12 per share, showing a 51.35% year-over-year growth. With revenues estimated at $8.62 billion, indicating 22.16% growth, Shopify’s earnings have consistently beaten estimates in the past. However, the Value Score suggests SHOP’s stock is currently overvalued compared to the industry standards.

Shopify stock is expected to benefit from the strong sales expected during the holiday season. With a Zacks Rank #1 (Strong Buy), SHOP is well-positioned for growth despite its premium valuation. The company’s focus on expanding its enterprise presence and international footprint bodes well for future prospects, making it an attractive investment option.



Read more at Nasdaq: 3 Reasons Shopify Stock is a Buy: Beyond the 21% Surge in a Month