Evaluating NYSE:SHOP for high Growth Investment Opportunities.

SHOPIFY INC - CLASS A (NYSE:SHOP) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NYSE:SHOP.

Technical Analysis Observations

ChartMill assigns a Technical Rating to every stock. This score ranges from 0 to 10 and is updated daily. The score is determined by evaluating multiple technical indicators and properties.

Overall SHOP gets a technical rating of 10 out of 10. This is due to a consistent performance in both the short and longer term time frames. Also compared to the overall market, SHOP is showing a nice and steady performance.

• The long and short term trends are both positive. This is looking good!
• Looking at the yearly performance, SHOP did better than 92% of all other stocks.
• SHOP is one of the better performing stocks in the IT Services industry, it outperforms 86% of 83 stocks in the same industry.
• SHOP is currently trading near its 52 week high, which is a good sign. The S&P500 Index however is also trading near new highs, which makes the performance in line with the market.
• In the last month SHOP has a been trading in the 77.12 - 115.62 range, which is quite wide. It is currently trading near the high of this range.

Check the latest full technical report of SHOP for a complete technical analysis.

Why is NYSE:SHOP a setup?

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, NYSE:SHOP has a 8 as its setup rating, indicating its current consolidation status.

SHOP has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is very little resistance above the current price. There is a support zone below the current price at 109.45, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for SHOP in the last couple of days, which is a good sign.

Looking into the high growth metrics of SHOPIFY INC - CLASS A

• The EPS of SHOPIFY INC - CLASS A has exhibited growth from one quarter to another (Q2Q), with a 45.83% increase. This underscores the company's ability to generate higher earnings and improve its financial standing.
• SHOPIFY INC - CLASS A has experienced 26.14% q2q revenue growth, indicating a significant sales increase.
• SHOPIFY INC - CLASS A has demonstrated strong 1-year revenue growth of 23.47%, reflecting revenue momentum and its ability to generate consistent top-line expansion. This growth underscores the company's strong market position and its potential for future success.
• The average next Quarter EPS Estimate by analysts was adjusted by 19.17%, reflecting the evolving market expectations for the company's EPS growth.
• The quarterly earnings of SHOPIFY INC - CLASS A have shown a 45.83% increase compared to the previous quarter, as revealed in the recent financial report. This growth signifies positive momentum in the company's financials, pointing towards a promising upward trend
• With a favorable trend in its operating margin over the past year, SHOPIFY INC - CLASS A demonstrates its ability to enhance profitability through efficient operations. This growth reflects the company's focus on optimizing its cost structure.
• SHOPIFY INC - CLASS A has experienced notable growth in its free cash flow (FCF) over the past year, signaling improved cash generation and strong financial performance. This growth suggests the company's ability to generate excess cash for reinvestment or shareholder returns.
• SHOPIFY INC - CLASS A showcases a robust Return on Equity (ROE) of 13.68%, indicating its ability to generate favorable returns for shareholders. This metric underscores the company's efficiency in utilizing its equity capital to generate profits.
• SHOPIFY INC - CLASS A maintains a healthy Debt-to-Equity ratio of 0.09. This indicates the company's conservative capital structure and signifies its ability to effectively manage debt obligations while maintaining a strong equity position.
• With institutional shareholders at 64.97%, SHOPIFY INC - CLASS A demonstrates a healthy ownership distribution. This reflects a mix of institutional and individual investors, creating a market environment that may foster increased trading activity and price discovery.
• SHOPIFY INC - CLASS A has consistently surpassed EPS estimates in the last 4 quarters, reflecting its strong financial performance and effective management. This trend suggests the company's ability to generate positive earnings surprises and drive shareholder value.
• SHOPIFY INC - CLASS A has achieved an impressive Relative Strength (RS) rating of 92.06, showcasing its ability to outperform the broader market. This strong performance positions SHOPIFY INC - CLASS A as an attractive stock for potential price appreciation.

More ideas for high growth momentum breakouts can be found on ChartMill in our High Growth Momentum Breakout screen.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.