Shopify Stock wins update, e-commerce stock rebounds after first-quarter sell-off

Shopify (SHOP) outperformed Evercore ISI on Friday as the e-commerce company continued to recover from a sell-off in first-quarter earnings. Shopify shares are down 17% in 2024, but are currently trading above their 50-day moving average.

On the stock market today, Shopify shares rose more than 2% to 66.15. Through Thursday’s market close, stocks had gained in 12 of the last 13 trading sessions.

Evercore ISI analyst Mark Mahaney on Friday upgraded Shopify stock to outperform from neutral.

“We believe that the disappointing operating margin outlook from the last two EPS reports – and the material share price and estimate revisions resulting from them – have largely de-risked SHOP shares, and we believe that the Street Go-Forward operating margin expansion and free margin expansion assumptions cash flows are reasonable,” Mahaney said in the report.

Shopify announced its first quarter results on May 8.

Mahaney adds: “We also believe that Shopify’s decision to leverage social media marketing to accelerate international growth makes tactical and strategic sense.”

Shopify Stock: Logistics company sold

Shopify builds e-commerce sites for small businesses and partners with others to handle digital payments and shipping.

Additionally, the company sold its delivery and logistics business to Flexport in 2023, easing Wall Street’s concerns about rising capital spending.

Meanwhile, SHOP stock has a relative strength rating of just 23 out of a best-possible 99, according to IBD’s stock screener.

JPMorgan initiated an overweight rating on Shopify stock on June 11. “We believe Shopify’s breadth of products, ease of use and scale are a clear competitive advantage that will continue to drive industry-leading growth,” JPMorgan analyst Reginald Smith said in the report.

He added: “Shopify’s investment in research and development outperforms the competition, resulting in an unrivaled range of features and capabilities that keep the company at the cutting edge.”

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.

YOU MAY LIKE:

Want to trade options? Here are the basics to get you started

Monitor IBD’s Breaking Out Today list for companies that have achieved new buy points

IBD Digital: Unlock IBD’s premium stock lists, tools and analysis today

Learn how to time the market with IBD’s ETF market strategy