Shopify Shares Rally More Than 50% in 7 Days As Exec Touts Traffic Growth

Shopify has emerged as a much-debated stock in a time of rapid change for ecommerce.
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Shopify shares are on a roll -- and the company's technology chief is predicting more growth ahead. 

Shopify CTO Jean-Michel Lemieux wrote in a Twitter message on Friday that "it won't be long" before the platform's traffic more than doubles, capping off a seven-day growth streak for Shopify's stock. Shares  (SHOP) - Get Report closed 12.2% higher on Friday at $590.39, and have popped by more than 50% since April 7. 

Amid rapid change for ecommerce, Shopify has emerged as a hotly debated tech stock of the moment. 

The company, and its more bullish investors, make the case that Shopify will benefit from widespread adoption of online shopping as consumers stay home by the millions. 

Shopify allows merchants to quickly set up and manage an online store, and sells both a recurring subscription product and add-on services for shipping, payments and fulfillment. 

In a press release earlier this month, Shopify noted a large volume of brick-and-mortar businesses rapidly moving online in response to the pandemic, but also revoked its full-year sales guidance owing to various sources of uncertainty. 

It cited merchants heavily leveraging discounts and its termination of "thousands" of merchants charging unfair prices for COVID-related products, among other factors. 

The company says it will meet or exceed its first-quarter financial outlook, however. Wall Street is expecting $444 million in sales and a non-GAAP loss of 19 cents per share for the March quarter. 

In a note last week, analysts at Raymond James argued that the faltering economy poses near-term risks for Shopify shares, even if it is poised to benefit in the long term from a broad transition to ecommerce. 

Raymond James' Brian Peterson cautioned that Shopify seems to have significant exposure to discretionary goods that homebound, budget-conscious consumers are avoiding right now. 

"Shopify doesn't disclose its [gross margin value] mix by product, although our research suggests significant exposure to highly discretionary categories like apparel and high-end cosmetics," Peterson noted.