Shopify on Friday won an upgrade to outperform from Evercore ISI as the e-commerce company continues to claw back from a sell-off on first quarter results. Shopify stock has retreated 17% in 2024 but now trades above its 50-day moving average.
On the stock market today, Shopify stock advanced more than 2% to 66.15. Shares had gained on 12 of the last 13 trading sessions as of Thursday's market close.
Evercore ISI analyst Mark Mahaney on Friday upgraded Shopify stock to outperform from neutral.
"We believe that disappointing operating margin outlooks over the last two EPS reports — and the resulting material share price and estimates corrections — have largely de-risked SHOP stock, and we view Street go-forward operating and free cash flow margin ramp assumptions as reasonable," Mahaney said in a report.
Shopify reported Q1 results on May 8.
Mahaney added: "We also believe that Shopify's decision to lean into social media marketing to accelerate its international growth makes tactical and strategic sense."
Shopify Stock: Logistics Business Sold
Shopify sets up e-commerce websites for small businesses, and partners with others to handle digital payments and shipping.
Also, the company in 2023 sold its delivery and logistics business to Flexport, easing Wall Street worries over rising capital spending.
Meanwhile, SHOP stock holds a Relative Strength Rating of only 23 out of a best-possible 99, according to IBD Stock checkup.
JPMorgan on June 11 initiated coverage on Shopify stock with an overweight rating. "We believe Shopify's product breadth, ease of use, and scale are distinct competitive advantages that will continue to fuel industry-leading growth," said JPMorgan analyst Reginald Smith in a report.
He added: "Shopify's R&D investment dwarfs peers', culminating in an unrivaled array of features and capabilities that keep the company on the cutting edge."
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