Jim Cramer, the renowned financial commentator, has just doubled down on his bullish outlook for Shopify (SHOP), and the timing couldn’t be better. The e-commerce giant’s stock has recently formed a Golden Cross, a powerful technical indicator signaling a potential upward trajectory. For the uninitiated, a Golden Cross emerges when a stock’s short-term moving average surpasses its long-term moving average, traditionally interpreted as a bullish signal.
During a recent segment on CNBC’s Mad Money, Cramer didn’t mince words, declaring, “I think Shopify is at a great level to buy. Harvey Finkelstein is doing a terrific job, and the stock should be perfect.” This enthusiastic endorsement is hardly surprising, considering Shopify’s stellar performance. In the past month alone, the stock has soared 20.56%, adding to its impressive year-to-date gain of 11.26%. But what’s even more remarkable is its 53.50% surge over the past year.
Traders and analysts alike are buzzing about Shopify’s current stock performance, fueled by the Golden Cross formation. With Shopify’s stock price currently hovering at $80.86, it comfortably sits above its 50-day simple moving average of $72.34 and its 200-day moving average of $71.82. These indicators, combined with its eight-day and 20-day averages, all point towards a bullish trajectory, strongly suggesting that the momentum is on Shopify’s side.
Wall Street has also joined the chorus of praise for Shopify. Goldman Sachs recently upgraded Shopify to a Buy rating, echoing the sentiments of JPMorgan and BofA, who have also endorsed the stock, citing its product breadth, user-friendliness, and impressive scale as key strengths.
If you’re wondering why analysts and investors are so enthusiastic about Shopify, take a look at its stunning Q2 results. Free cash flow skyrocketed by a remarkable 240% to $333 million, while revenue jumped by 21% year-over-year. Despite a slight slowdown in GMV growth, the company still generated a massive $67.2 billion in gross merchandise volume. With third-quarter revenue expected to grow in the low-to-mid 20% range, it’s no surprise that Shopify is being hailed as a “best of breed” stock. While the forward P/E ratio is currently hovering near 60, its lofty valuation appears justified considering EPS growth expectations of 43%.
Cramer’s bullish call, bolstered by Shopify’s Golden Cross and strong fundamentals, could be a winning combination for investors. The stock’s positive technical setup, coupled with Wall Street’s enthusiastic endorsement, makes Shopify a name to watch closely as we head into 2025. Investors seeking the next big move might find it in Shopify, a company not merely crossing averages but crossing into new territory.
