Is NYSE:SHOP suited for high growth investing?

Our stockscreener has identified a possible breakout setup on SHOPIFY INC - CLASS A (NYSE:SHOP). This occurs when the stock consolidates following a significant upward movement. While the breakout outcome cannot be guaranteed, it may be worth monitoring NYSE:SHOP for potential opportunities.

Analyzing the Technical Aspects

ChartMill assigns a proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.

We assign a technical rating of 10 out of 10 to SHOP. Both in the recent history as in the last year, SHOP has proven to be a steady performer, scoring decent points in every aspect analyzed.

• Both the short term and long term trends are positive. This is a very positive sign.
• When comparing the yearly performance of all stocks, we notice that SHOP is one of the better performing stocks in the market, outperforming 88% of all stocks.
• 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 102.52 - 125.95 range, which is quite wide. It is currently trading near the high of this range.
• SHOP is an average performer in the IT Services industry, it outperforms 67% of 82 stocks in the same industry.
• Volume is considerably higher in the last couple of days.

For an up to date full technical analysis you can check the technical report of SHOP

How do we evaluate the setup for NYSE:SHOP?

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the extent of consolidation in the stock based on multiple short-term technical indicators. Currently, NYSE:SHOP has a 7 as its setup rating:

SHOP has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately. There is very little resistance above the current price. There is a support zone below the current price at 114.39, a Stop Loss order could be placed below this zone. Very recently a Pocket Pivot signal was observed. This is another positive sign.

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

• SHOPIFY INC - CLASS A has shown positive momentum in its earnings per share (EPS) on a quarter-to-quarter (Q2Q) basis, with a 29.41% increase. This reflects the company's successful execution of its business strategies and its commitment to delivering improved financial results.
• With consistent quarter-to-quarter (Q2Q) revenue growth of 31.16%, SHOPIFY INC - CLASS A exemplifies its ability to generate increased sales and revenue streams. This growth signifies the company's strong business performance and its potential for continued growth.
• SHOPIFY INC - CLASS A has seen a 19.64% change in the average next Quarter EPS Estimate by analysts over the last 3 months, signaling the shifting perception of the company's EPS outlook.
• The quarterly earnings of SHOPIFY INC - CLASS A have shown a 29.41% 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.
• With a favorable trend in its free cash flow (FCF) over the past year, SHOPIFY INC - CLASS A demonstrates its ability to generate robust cash flows and maintain financial stability. This growth reflects the company's focus on efficient capital allocation and cash management.
• The Return on Equity(ROE) of SHOPIFY INC - CLASS A is 13.68%, which is a strong number. This indicates the company's ability to generate favorable returns for shareholders and reflects its effective management of resources.
• With a Debt-to-Equity ratio at 0.09, SHOPIFY INC - CLASS A showcases its prudent financial management. The company's balanced approach between debt and equity reflects its commitment to maintaining a stable capital structure.
• With institutional shareholders at 70.55%, 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.
• The Relative Strength (RS) of SHOPIFY INC - CLASS A has been consistently solid, with a current 88.61 rating. This highlights the stock's ability to exhibit sustained price strength and signifies its competitive advantage. SHOPIFY INC - CLASS A exhibits strong prospects for further price appreciation.

More high growth momentum breakout stocks can be found 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.