Shopify Inc. stock is considered a bargain due to high free cash flow margins and projected sales growth over the next 12 months. Analysts predict a potential increase of 21.9% to $136.66. Shopify’s Q1 performance showed strong revenue growth and a robust free cash flow margin of 15%.

Management is focused on maintaining strong free cash flow margins, with a 15% margin in Q1 and expectations for similar results in Q2. The company generated $363 million in free cash flow in the first half of the year, showing significant growth potential with rising sales projections.

Analysts forecast a 22.5% increase in sales for Shopify this year, with a projected next 12 months revenue of $12 billion. This growth, combined with an 18.5% free cash flow margin, could result in a free cash flow of $2.4 billion, driving the stock value higher to nearly $137 per share.

Investors can capitalize on Shopify’s potential by selling short out-of-the-money put options. For example, a $100 put option with a 10.8% lower strike price can yield 3.28% monthly. This defensive strategy offers downside protection while waiting for potential gains.

The expected return on selling short put options for Shopify is high, with a potential 19%+ annualized return. By strategically selecting strike prices, investors can generate significant yields while mitigating risks. Shopify’s undervalued stock presents an opportunity for investors seeking profitable short-term strategies.

Read more at Yahoo Finance: Shopify Stock is a Bargain