Shopify Stock offers an intriguing entry point

Goldman Sachs upgraded Shopify’s stock from “neutral” to “buy”

Shares Shopify Inc. (NYSE:SHOP) are 3.3% higher in quotations before the opening of the session after the Goldman Sachs note. The Wall Street analyst upgraded SHOP to “buy” from “neutral” and raised his price target to $74 from $67, pointing to an attractive entry point for the stock after an uncertain start to 2024.

Notably, e-commerce stocks are down 24.5% year-to-date amid unfavorable conditions earlier this month after a poor quarterly report. Shopify shares closed yesterday at their lowest level since November 2023, ending the session at $57.02.

As of today, analysts were divided almost in half. There are 39 analysts covering BUY, where 19 people answered “buy” or better, and 20 recommended a lukewarm “hold”. This leaves plenty of room for more analysts to change their minds.

Options traders have been favoring calls lately, according to Shopify’s stock’s 10-day call-to-sell volume ratio of 3.10 on the International Stock Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks higher than 85% of last year’s readings.

These options are also inexpensive at the moment given the Schaeffer Volatility Index (SVI) of 36%, which is in the lower second percentile of the annual range. This means that options traders are currently pricing in low volatility expectations.