Shopify Inc. (SHOP) shares rose nearly three percent during Tuesday's session after Rosenblatt raised its price target from $410.00 to $481.00 per share and reiterated its Buy rating amid strong expectations for the Shopify Fulfillment Network.
Analyst Mark Zgutowicz projects that Shopify Fulfillment Network revenue will grow from $300 million in 2021 to over $6 billion by 2025. He also expects a modest gross merchandise volume (GMV) acceleration during the current period and substantially lifted his out-year revenue expectations.
The stock reached new 52-week highs following the analyst commentary, which represents a nearly 200 percent increase so far this year. Last week, the company became the tenth largest publicly-traded company in Canada and surpassed the market capitalization of eBay Inc. (EBAY) in the United States.
Last quarter, the company reported revenue that rose 47.8 percent to $361.98 million, beating consensus estimates by $11.39 million, and non-GAAP earnings of 14 cents per share, beating consensus estimates by 12 cents per share. Gross merchandise volume (GMV) also improved by over 50 percent.
From a technical standpoint, the stock reached a new 52 week high during the session before giving up some ground. The relative strength index (RSI) rose to overbought levels of 72.35, but the moving average convergence-divergence (MACD) remains in a strong bullish uptrend. These indicators suggest that the stock could see some consolidation before continuing its move higher over the coming weeks.
Traders should watch for some consolidation above reaction highs of around $370.00 over the coming sessions before making a move higher. If the stock breaks down from those levels, traders could see a move to the 50-day moving average at $334.87. If the stock rebounds higher, traders could see a move to fresh all-time highs.
Chart courtesy of TrendSpider.com. Author holds no position in the stock(s) mentioned except through passively managed index funds.