Goldman's Upgrade on Shopify's Rating Fuels Heavy Trading on Stock's Call Options
Goldman Sachs' upgrade on Shopify's stock rating and the increase in its price target fueled a surge in call options volume.
Shopify's stock rating was raised to buy from neutral, The Fly reported. Goldman noted the company's "significant technology moat" in e-commerce software as it boosted the price target to $74 from $67, according to the report. It cited Goldman's optimism that Shopify's investments will fuel more durable revenue growth, according to the report.
The company has delivered revenue that exceeded average analysts' estimates in the past nine quarters, data from Capital IQ showed. In the second quarter ending on June 30, Shopify is expected to post revenue of $2 billion, up from $1.69 billion a year earlier. That's after the company posted 23% growth in the first quarter.
The upgrade helped send the stock climbing 3.8% to $59.20, fueling the surge in interest in its options. As of 12:15 p.m. in New York on Wednesday, about 194,640 options changed hands, making Shopify the eighth most active stock options, behind $Tesla(TSLA.US$, $NVIDIA(NVDA.US$, $Warner Bros Discovery(WBD.US$, $Advanced Micro Devices(AMD.US$, $Apple(AAPL.US$, $Starbucks(SBUX.US$, and $Amazon(AMZN.US$.
About 88% of those Shopify contracts are call options, data tracked by moomoo showed. And the heaviest volume is in call options that give the holder the right to buy Shopify stock at $60. More than 39,000 contracts changed hands around noon time, almost six times the volume a day earlier. That compares with open interest of 8,270.
The stock saw a net inflow of $14.6 million as of 12:26 p.m. in New York, reversing four days of net outflows as the stock slipped. Even technical indicators tracked by moomoo are mostly bullish, with the oscillator signaling that the stock is still oversold, and the trend is bullish.
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Moomoo Senior News and Community Manager
Former editor at Bloomberg, then Lazard Asset Management. Posts aren’t investment advice. Views are just mine.
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RVLTN : Shopify is a horrible company. They’ve laid off most of their employees the past year and anyone left servicing their clients knows nothing. DYOR.
This business depends on other businesses ( mostly small) to be happy with it, and they are so far from happy it’s not even an argument. Failure in sight and GS is pumping it to retail, how pathetic.