Shop is a good buy before today report?


Aime
Shopify (SHOP) seems to be a good buy before today's report, and here's why:
- Consistent Earnings Growth and Surprises:
- Earnings History: Shopify has a history of beating earnings estimates, with an average surprise of 27.50% over the last two quarters. This indicates a strong track record of exceeding expectations1.
- Expected Surprise: The company's Earnings ESP (Expected Surprise Prediction) is positive, which is a good sign of an earnings beat. This, combined with the Zacks Rank, suggests a high likelihood of delivering a positive surprise1.
- Revenue Growth Anticipation:
- Revenue Expectations: Analysts expect Shopify's revenue to grow by 23.4% year-over-year to $2.11 billion in the third quarter. This growth is supported by the company's momentum and the expansion of its subscription business2.
- Historical Performance: Shopify has beaten revenue estimates every single time over the past two years by an average of 3.1%. This consistent performance adds to the confidence in their ability to meet and exceed expectations3.
- Technical Indicators and Analyst Ratings:
- Technical Indicators: Shopify's stock is currently trading above its key moving averages, indicating a strong bullish trend. This is supported by a positive MACD and a high RSI, although the latter suggests it might be nearing overbought territory4.
- Analyst Ratings: The consensus analyst rating is a "Buy" with a price target of $78.93, and average price targets from Scotiabank, RBC Capital, and Loop Capital imply a slight upside54.
- Strategic Positioning and Market Trends: Shopify's focus on larger companies and its lower-priced e-commerce services position it well for market share gains. The overall e-commerce market is expected to grow significantly, which could benefit Shopify27.
In conclusion, Shopify's strong earnings history, positive analyst sentiment, and strategic positioning make it a compelling buy before today's report. However, investors should consider the stock's valuation and the potential risks before making any investment decisions.
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