Shopify Inc. (SHOP) shares rose more than 5% during Thursday's session after RBC Capital Markets reiterated its Outperform rating and raised its price target to $1,000 per share – a Street high and the stock's first four-figure price target.
Analyst Mark Mahaney acknowledges that Shopify's stock price has doubled year to date, but he believes that investors are still undervaluing the company's total addressable market, take rate potential, and operating margin. In addition, he believes that consumer buying patterns have permanently changed in favor of e-commerce throughout the COVID-19 crisis.
These sentiments mirror those of other, albeit less bullish, analysts. Earlier this week, Piper Sandler's Brent Bracelin upgraded Shopify stock to Overweight with an $843 price target, calling Shopify one of the best positioned digital commercial beneficiaries of the next decade. He believes that revenue is poised to quadruple to $12 billion by 2025.
From a technical standpoint, Shopify stock broke out from prior highs of $844.00 to fresh all-time highs during Thursday's session. The relative strength index (RSI) edged into overbought territory with a reading of 71.06, but the moving average convergence divergence (MACD) just experienced a bullish crossover that could signal the start of a new trend higher. These indicators suggest consolidation before a move higher.
Traders should watch for consolidation above prior highs at $844.00 over the coming sessions. If the stock continues to move higher, traders could see a move to trendline resistance at around $900.00. If the stock moves lower, traders could see a move toward trendline support and the 50-day moving average at $691.42, although that scenario seems less likely to occur given the bullish sentiment surrounding the stock.
The author holds no position in the stock(s) mentioned except through passively managed index funds.