Shopify Draws New Value with Growing NFT Presence

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Shopify Inc. (SHOPPING) proved to be a force to be reckoned with in the early days of the pandemic. When businesses were feverishly looking for a way to boost their online presence and stay open, the e-commerce platform stepped in.

Now that pandemic restrictions are being eased across much of the world, Shopify’s contribution to the global landscape appears to be a little smaller. However, Shopify could have a plan here and focus on one of the biggest new potential investment vehicles: non-fungible tokens (NFTs).

I’m optimistic about Shopify. While the price per share is out of reach for many retail investors, the company’s potential to improve from here is solid.

The past 12 months for Shopify have been one of steadily increasing earnings from March 2021 through November. However, the arrival of the Omicron variant of COVID-19 quickly sent Shopify down with the rest of the tech, despite the company’s pandemic benefactor position.

Shopify subsequently lost over half of its value between November 2021 and March 2022.

Although the latest news could help Shopify improve again. Shopify’s NFT software suite is reportedly currently in beta. This, in turn, suggests that a release could be imminent. Shopify is poised to offer both NFT mining and selling tools, which would allow users to both create and sell their own NFTs, getting in on the high volume of investing relatively early.

Take Wall Street

On Wall Street, Shopify has a Moderate Buy consensus rating. This is based on 13 buy and 14 hold ratings given over the past three months. Shopify’s average price target of $988.63 implies a 64.54% upside potential. Additionally, SHOP analysts’ price targets range from a low of $800 to a high of $1,500 per share.

Shopify’s Bargain Price Review

Shopify’s current share price, currently at $600.84 a share, will likely turn off most smaller investors. However, don’t be put off by the high price. Thanks to the recent movement and what we’ve already seen from the company, there’s a lot of upside potential in this stock.

Sure, Shopify’s massive expansion and speculative days could be behind it, since most businesses made their migration to an online space in the early days of the pandemic. When it became necessary to operate online, Shopify made it possible for many smaller businesses to do so.

Shopify’s earnings report showed a company that slowly began to decline. It has been falling since last November, and growth forecasts for 2022 are significantly lower than those for 2021. Admittedly, comparisons are particularly difficult these days.

2021 was unique in that it still had many of the restrictions of 2020 in play, but not all. People were able to get out and shop again, but many were concerned about this. Physical retail began a spluttering recovery, and most who wanted to make the leap online had already done so. That left Shopify with less room to grow and led to downward forecasts, at least in part.

It doesn’t help that Shopify is facing declining interest from both hedge funds and insiders. Insiders have sold over $51 million worth of shares in the past three months. Hedge funds lost 229,100 shares in the same period.

It’s worth noting that Cathie Wood’s Ark Fund bought Shopify for over $9 million earlier this week. Additionally, Shopify hasn’t announced dividends for shareholders just yet, so investors have to place their bets solely on growth.

However, this is a plus for Shopify at the moment. As expensive as Shopify stock is, the stock price is not only well below average, but also well below its lowest price targets. The current share price is also just under a third of the highest targets. While hitting the highest goal is currently a lost hope, even hitting the lowest goal means a gain of nearly 20%.

Shopify’s increasing drive to get into NFTs may or may not have an impact. But even without a big boost from NFTs, Shopify is still solid enough to generate these kinds of price gains on its own.

Final Views

Shopify will no doubt turn off many retail investors. However, there’s still plenty of room for growth at Shopify. While the accelerated digital migration inspired by the pandemic has already happened, Shopify is already looking for new ways to monetize its platform.

The company’s share price has been in a downtrend for months. That raises a potential opportunity for investors to re-enter with fresh profits. NFTs may not be the best star to hitch a wagon to, but the market’s growth over the past few months points to a possibility.

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