Zacks Investment Ideas feature highlights Shopify and Amazon

For Immediate ReleaseChicago, IL – February 7, 2025 – Today, Zacks Investment Ideas feature highlights Shopify Inc. SHOP and Amazon AMZN.Buy This Stock - Down -25% - Ahead of Earnings?Technology stocks chopped around to start 2025. The Nasdaq and the S&P 500 have held their ground at their 50-day moving averages as Wall Street is content to let the market cool following the impressive post-Trump election rally and the stellar two-year run.Despite the flood of earnings reports, the tariff battles, the DeepSeek news, and beyond, the market remains above its post-election breakout levels.See the Zacks Earnings Calendar to stay ahead of market-making news.The sideways movement and the rapid comebacks many artificial intelligence (AI) stocks made following their DeepSeek selloffs have left investors searching for tech stocks to buy at discounts.Shopify offers investors the chance to buy a growth-tech stock trading over 25% below its record highs even though it has skyrocketed over the last few years.Why This Amazon Competitor Is a Must-Buy Tech Stock with Huge Long-Term UpsideShopify Inc. stock has soared 360% off its 2022 lows, crushing the Tech sector’s 110% and Amazon’s 105%. Yet, SHOP trades 27% below its 2021 highs while Tech and Amazon trade near records.SHOP stock is breaking out to new 52-week highs heading into its Q4 earnings release on Tuesday, February 11. Shopify stock is also attempting to break above key levels from early 2022. The nearby chart also shows that Shopify’s long-term 50-week moving average recently crossed above its 200-week, something technical trades call the golden cross.Shopify is an e-commerce powerhouse with technology spanning website creation and design, sales tools, marketing help, payment solutions, automation offerings, inventory management, and much more.Shopify stand outs against its much larger e-commerce rival Amazon by catering to sellers and businesses. Amazon, on the other hand, focuses on getting consumers products as fast as possible at the lowest price.Shopify’s customers span entrepreneurs, small and mid-businesses, and larger enterprises. The company has expanded its in-person retail solutions and it aims to help its customers in four core phases of business: start, sell, market, and manage.Shopify’s days of 60% revenue growth are over, but it made up for slowing customer acquisition growth with higher prices and a focus on profits. Shopify raised its prices in 2023 (by roughly 30% for its various plans) for the first time in over a decade.Shopify is also committed to streamlining its business during the higher interest rate environment to help drive profits (SHOP's valuation levels are holding back the stock, which we will get to).Shopify is projected to grow its sales by 25% in 2024 and 22% in 2025 to surge from $7 billion to $10.71 billion in FY25 (SHOP did $1.6 billion in sales in pre-Covid 2019).More importantly, SHOP is expected to boost its adjusted earnings by 70% in FY24 and another 19% in FY25 to reach $1.51 per share vs. $0.74 in 2023.SHOP crushed our EPS estimates by an average of 25% in the trailing four quartets and its Most Accurate estimate for Q4 came in 23% above consensus at +$0.54 per shareIs Shopify Stock Ready for a Breakout?Shopify’s 10-for-1 stock split in mid-2022 helped make it more attainable to a larger swath of investors (currently trading for roughly $122 a share).SHOP’s valuation is holding the stock back, trading at 103X forward 12-month earnings compared to Tech’s 26.1X and Amazon’s 37.8X.That said, SHOP’s 2.4 PEG ratio, with factors in its long-term earnings growth outlook, marks a roughly 90% discount to its recent highs and a much smaller premium compared to the Zacks Tech sector’s 1.7.Shopify stock was a Wall Street star long before Covid. Shopify has soared over 4,100% since its 2015 IPO, blowing away Amazon’s 1,000% and Tech’s 315%.SHOP's run includes a 160% climb in the past five years, with its recent surge helping it outpace Tech during this stretch despite trading 27% below its highs.If Shopify offers strong earnings guidance, it might be ready to break out higher and start marching closer to its 2021 peaks. It is also worth stressing that SHOP’s offerings are critical to its customers and its balance sheet is stellar.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. 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