Business & Investment

Will Shopify Stock (TSX: SHOP) reach $ 2,000 in 2021?

Every time Shopify asks if it reaches a certain price, it always seems to be blown beyond that.After the stock price hit a high of over $ 1,200 last June, I Whether you will receive $ 1,500.. In the end, it went up to over $ 1,600.It’s far from the beginning of the year When $ 600 was still a question mark.. In both cases, Shopify realized that it was likely to reach both price ranges, but the bigger question was whether the stock would stay there given its high valuation. So far, it has been hovering around the $ 1,500 mark.

But now it’s time to consider the next milestone, $ 2,000. Can Shopify set yet another new record this year?

That’s why this is possible

The coronavirus pandemic has kept consumers indoors and surged online shopping. Before the pandemic, e-commerce companies began to lose sales. After a 73% increase in 2017, Shopify’s revenue increased 59% in 2018 and 47% the following year. It was clear that the pattern would continue, as it was increasing at a rate of decline, especially as it was not the only option for merchants and lacked a strong competitive advantage.

But in the most recent quarter, Shopify’s revenue was $ 767 million, double the year-ago quarter. And if the company can continue to build on these strong growth numbers, it could continue to push the bulls behind the stock price.

Another positive development is that Shopify closed in the black in two of the last three quarters. Earnings used to be a challenge for the company, but now it looks like it’s turning a corner. If Shopify can continue to generate such strong top and bottom lines, it’s easy to get $ 2,000.

That’s why this may not happen

The challenge is that Shopify’s success this year depends on its sales. The problem I’m seeing is that if the economy recovers and people return to their normal daily activities, they may not need as much online shopping as they used to (in the short term anyway). As COVID-19 made it difficult, consumers could even try to make up for the lost time and spend more time in malls and stores than in the past year.

Also, slower growth can surprise investors and lead to the sale of Shopify’s stock.

Which scenario is more likely?

If it exceeds $ 2,000 in 2021, Shopify’s share price has risen by more than 40% this year. That’s not out of the question, but even for Shopify, it can be a long shot.It’s already the most valuable stock TSX The higher the price, the bigger the stock price bubble. This time around, stock prices are unlikely to reach yet another milestone, at least this year. To do that, we need too much.

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Stupid contributor David Jagielski There are no positions in any of the listed stocks. Tom Gardner I own a stake in Shopify. Motley Fool owns and recommends shares in Shopify and Shopify.

Will Shopify Stock (TSX: SHOP) reach $ 2,000 in 2021? Will Shopify Stock (TSX: SHOP) reach $ 2,000 in 2021?

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