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Bear of the Day: Shopify (SHOP)

Shopify (SHOP) is the $55 billion upstart taking on Amazon (AMZN) and Ebay (EBAY) in the small business etailer platform market.

 

And earnings estimates just plunged after the company revealed a big investment year ahead in their Q4 report delivered on February 12.

 

Since that reveal, the Zacks consensus for full-year 2020 EPS dropped over 75% from $0.89 to $0.21. Next year got clobbered 55% from $1.60 to just $0.72.

 

Analysts also found themselves having to adjust their ratings as well since the hyper-growth platform trades at 25 times sales.

 

Shopify was downgraded to Neutral from Outperform at Credit Suisse with analyst Brad Zelnick saying that despite another strong quarter from Shopify -- and his positive fundamental view on the company's long-term opportunity and belief in management's strategy and ability to execute -- he cut the shares on its "lofty valuation and embedded expectations."

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Yet, price targets were raised dramatically across the board in February after the company call, and that's why shares soared from $500 to nearly $600 on Feb 12...

 

SunTrust: Hold $340 to $585

Baird: Outperform $465 to $590

Wedbush: Neutral $325 to $475

Wells Fargo: Overweight $400 to $600

KeyCorp: Overweight $485 to $575

Rosenblatt: Buy $481 to $630

UBS Group: Underperform $450

Credit Suisse: Neutral $450 to $575

Raymond James: Outperform $365 to $600

Canaccord Genuity: Buy $385 to $600

Royal Bank of Canada: Outperform $400 to $650

 

Investors wanting to get into Shopify (myself included) probably thought we were going to get our chance in the recent correction.

 

I wanted to get in on the Jan 9 gap fill near $420 but I was too slow on Friday.

 

Now I'll have to wait until SHOP is out of the Zacks Rank cellar.

 

Looking for Stocks with Skyrocketing Upside?

 

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

 

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

 

See the pot trades we're targeting>>


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Shopify Inc. (SHOP) : Free Stock Analysis Report
 
eBay Inc. (EBAY) : Free Stock Analysis Report
 
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
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