How to buy Shopify (SHOP) stock
Shopify (NYSE: SHOP) is one of the world's leading e-commerce platforms. Shopify's e-commerce services enable businesses to set up their own online stores, process payments, fulfill orders, manage marketing campaigns, and more. Those options are attractive to smaller merchants who don't want to join a crowded third-party marketplace like Amazon, Etsy, or eBay. Buying shares of Shopify stock may seem appealing if you’re looking to invest in a high-growth company.
How you can buy Shopify stock?
Once you’ve decided you’re comfortable with the risks involved in investing in shares, you‘ll need to open an brokerage account. To buy shares online, you typically need to go through an intermediary or ‘broker’ known as an online share trading platform. You can buy and sell shares of Shopify through any major online discount brokerage, such as Charles Schwab, Webull, E*Trade, Fidelity, Robinhood or TD Ameritrade.
Most online brokerage firms are now offers zero-commission and fractional share trading. Since commissions are the biggest trading expense, choosing a no-commission broker helps you build a small account faster. Fractional shares reduce your risk in the market by allowing you to diversify your risk across multiple companies rather than concentrating your account in one company.
If you’re planning on buying Shopify stock yourself, always do plenty of research before buying. When getting into the nitty gritty of researching Pfizer, you can take a look at company annual reports to find out about company strategy, core business activities, whether it is making a profit or loss and what its future prospects are. Reports and forecasts published by stockbrokers can also be helpful. And you can also reference credible investing sites like Morningstar, a reputable resource for stock research and ratings.
Purchasing individual stocks is not the only way to invest in Nvidia stock. You may decide that you want to invest in a combination of shares and funds. With an ETF, you spread your risk across several other companies, reducing the chances of taking a loss….. The largest ETF holder of Shopify is the ARK Innovation ETF (ARKK). Others ETF offering you exposure to Shopify stock include Franklin Disruptive Commerce ETF (BUYZ), and Simplify Volt Fintech Disruption ETF (VFIN).
If you’re not comfortable going it alone, you may want choose an advisory service, so that an adviser can recommend which investments to make. You’ll pay extra for this advice. If you’re disinclined to pay the fees that come with a financial advisor, consider opening an account with a robo-advisor. These automatic investment managers learn about your investor profile and build a portfolio accordingly.
Should you invest in Shopify?
Shopify was a big winner in 2020 and 2021, spurred on by pandemic-related restrictions and lockdowns. The company has a history of huge earnings and sales growth over the past two years. This shows that Shopify is the top choice for merchants looking to sell their goods online and its growth will likely continue to outpace e-commerce adoption overall. But profits fell in its latest two quarters and are likely to remain weak for the next four, as the torrid pace of sales slows.
Looking ahead, Shopify continued to warn of slower growth, as well as higher spending and investments. A key area of investment is the Shopify Fulfillment Network. Other areas of investment include the Shopify app and international expansion. It's targeting $1 billion in capex in 2023 and 2024, specifically for key U.S. warehouse hubs.
But does that painful pullback represent a good buying opportunity for investors who missed its previous rally?
Is Shopify stock a buy now?
Shopify's (NYSE:SHOP) stock plunged more than 55% this year. That drawdown has erased most of the stock's gains since the onset of the pandemic in early 2020. Based on Shopify’s current price of $600.84 per share, Shopify trades at 18 times its 2022 sales. That price-to-sales ratio might seem reasonable, but a lot of other high-growth tech stocks with comparable revenue growth are trading at even lower valuations. Therefore, I think it's better to raise more cash and wait for a better buying opportunity down the road. If high growth resumes and valuation declines a little more, preferably when its price-to-sales ratio hits the high single digits, it could be a good buying.
Out of 36 analysts on Wall Street, 16 rate SHOP a buy, 19 have a hold and one has a sell. On average, Wall Street analysts predict that Shopify’s share price could reach $900 in the next twelve months, with a high estimate of $1200 and a low estimate of $520.
