Why Shopify Stock Jumped 15% in March

Shopify e-commerce platform on a smartphone, laptop, and tablet

What happened

Despite the S&P 500 's flat finish to March, Shopify (NYSE: SHOP) stock soared 15% during the month, according to data provided by S&P Global Market Intelligence .

So what

While Shopify didn't announce anything major during March, the stock's overall rise likely reflects ongoing bullishness as investors and analysts digest the implications of the company's exceptional fourth quarter, as well as Shopify's overall massive growth last year .

In Shopify's fourth quarter, which was reported on Feb. 15, the company reported revenue of $130.4 million, up 86% year over year and well above a consensus analyst estimate for revenue of $121.6 million. One analyst from BTIG subsequently raised their price target for Shopify from $65 to $75 during March, likely driving some of the stock's increase during the month. BTIG analyst Abhinav Kapur said (via Benzinga ) he believes Shopify is only in the early stages of its growth.

Shopify is trading at about $68 at the time of this writing, up about 58% this year.

Now what

There's no doubt that Shopify is well positioned at the center of a key growth opportunity. As Shopify CFO Russ Jones articulated in the most recent quarterly earnings report, its 90% and 99% growth in revenue and gross merchandise volume, respectively, in 2016 "speaks to the enormous opportunity retail right now and our strategic position within it."

But with Shopify's stock trading so much higher recently, investors will want to ensure Shopify delivers on the market's high growth expectations. If the company's growth decelerates faster than expected, investors may want to reevaluate the stock's lofty valuation.

10 stocks we like better than Shopify

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Shopify wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of April 3, 2017

Daniel Sparks has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Shopify. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.