Shopify Stock Surges Past 52-Week Highs: Is it Still a Buy Today?

Shopify (TSX:SHOP) stock reported yet another record-setting Black Friday-Cyber Monday weekend. But does that mean it’s still a buy?

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Shopify (TSX:SHOP) continues to soar past 52-week highs as we get closer and closer to the end of 2023. Shopify stock in particular saw a major boost that put it past $100 per share after putting out its Black Friday results. Yet the question remains: is it going to drop once more and burn investors? Or is this the start of another major rally?

What happened?

Shopify stock already climbed past 52-week highs as the tech stock made some severe changes over the last year. The company announced it would be selling off its logistics business to Flexport for a 13% stake in the company. Further, it made major layoffs among management, all to continue its path towards profitability.

This was achieved with the stock achieved cash flow positivity for multiple quarters. Yet there was a major jump during the last third-quarter report. This came as the company saw revenue up 25% year over year, with profit up 36% year over year! Further, it operated with free cash flow that was positive for the fourth consecutive quarter, at 16% of revenue.

Several launches also helped the stock along. The company announced its “Retail Plan.” This was to start a new pricing plan for those in brick-and-mortar businesses that mainly sell in person. It would include all Shopify stock’s point-of-sale Pro features with this move. Further, it expanded its Shopify markets Pro, optimized Shopify Checkout, and even integrated an app using Amazon’s fulfillment network. You can add Buy with Prime to Shopify Checkout, making it even easier to use Shopify Payments.

BFCM

All this has demonstrated how Shopify stock has refocused on ecommerce. And this was particularly seen during its Black Friday-Cyber Monday results. Shopify stock achieved record results once again — something many wondered would happen at all.

Shopify stock reported a record US$9.3 billion in sales over the entire weekend. This was a 24% increase over the year before, with more than 61 million consumers using it around the world. Shopify stock saw a 60% year-over-year increase in sales made through Shop Pay, which was a huge milestone in itself. Further, more than 55,000 merchants reported having their highest-selling day ever on Shopify.

What’s important to note is that while this is great, there is more to come. We still have the holiday season coming, with fourth-quarter results after that. So, it does look quite likely that this could be only the start of a great year.

Foolish takeaway

It’s been a long and arduous journey for investors who have been invested in Shopify stock. The company hit all-time highs of $228 per share (adjusted for a stock split) before seeing them drop. And then, it didn’t seem like it would get any better until this year.

Now, shares are back in the three-digit territory. And what’s more, the market is only just starting to recover. November marked the biggest sustained rally of the year. As we enter 2024 with great news coming out from companies like Shopify stock, this could certainly mark a turnaround for the market in 2024.

As for Shopify stock, this is certainly a stock you may want to consider getting back into — especially if it’s once more headed back towards $228 per share.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in Shopify. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.

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