Latest news with #Nasdaq-100EqualWeightedIndex
Business Insider
14 hours ago
- Business
- Business Insider
Thomson Reuters to join Nasdaq-100 Index on July 28
Nasdaq announced that Thomson Reuters (TRI), will become a component of the Nasdaq-100 Index and the Nasdaq-100 Equal Weighted Index prior to market open on Monday, July 28, 2025. Thomson Reuters Corp will replace ANSYS (ANSS) in the Nasdaq-100 Index and the Nasdaq-100 Equal Weighted Index. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
Yahoo
14-05-2025
- Business
- Yahoo
Strong Q1 and Nasdaq Listing Signal Bright Future for Shopify Stock (SHOP)
Shopify (SHOP) is firing on all cylinders, recording awe-inspiring results that show zero sign of slowing down. Merchant adoption continues to climb, and Shopify Payments is gaining notable traction. On top of that, the company is generating solid free cash flow as it tightens costs and introduces more high-margin products. To symbolize the company's coming of age, Shopify is set to join the Nasdaq 100 (NDX) and the Nasdaq-100 Equal Weighted Index (NDXE) later this month. Quickly and easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter With global growth, smarter AI tools, and a leaner operation, Shopify looks well-positioned to maintain this momentum. I'm stoically bullish on SHOP stock and have initiated a long position. Shopify's recent earnings report, which included a 27% YoY rise in revenues and a 22% rise in profit, further entrenches my bullish stance. Shopify's Q1 earnings, which the company posted last Thursday, were nothing short of excellent. Quarterly revenues reached $2.36 billion, with Gross Merchandise Volume (GMV) climbing 23% to $74.75 billion, powered by a 32% surge in international GMV and a staggering 109% leap in B2B GMV. Speaking on the post-earnings call, President Harley Finkelstein pointed to Shopify's unified commerce platform (now live in 39 countries) as a magnet for merchants worldwide. Moreover, Shopify Payments penetration hit 64%, up from 60%, processing $47.5 billion, a 31% jump. The numbers tell a broader story. Offline GMV grew 23%, proving Shopify's not just an online play, while Monthly Recurring Revenue (MRR) advanced 21% to $182 million, driven by Shopify Plus and subscription plans. Management noted the platform's adaptability, with AI tools streamlining merchant operations and cross-border trade holding steady at 15% of GMV. All in all, the writing on the wall is that Shopify's multi-channel prowess spreads at a breakneck pace from mom-and-pop shops to global brands. However, besides Shopifty's impressive top-line growth, its profitability metrics were downright dazzling. Gross profit rose 22% to $1.17 billion, with operating income doubling to $203 million for a 9% margin, up from 5% a year ago. Free cash flow stole the spotlight, surging 56% to $363 million, delivering a 15% margin, marking seven straight quarters of double-digit margins. So, beyond growth, we see disciplined capital and spending controls. Indeed, Shopify's cost management deserves applause. Operating expenses as a percentage of revenue declined from 51% in Q1 2023 to 36% in Q1 2025, easing a long-time investor's worry. Stock-based compensation, another sore spot, is projected to stabilize at $120 million for Q2, a fraction of revenues. In the meantime, Shopify Payments has transformed into a cash machine via frictionless transaction fees, translating to ever-rising gross margins. As a rising number of merchants opt to switch to Shopify Payments for their payment processing over time, there is no reason to assume that this trend is set to reverse anytime soon. Shopify's stock slipped post-earnings, which I found pretty surprising given how powerful its momentum was once again proven to be. Now, historically, SHOP's nosebleed valuations, often over 20x sales, kept cautious investors at bay, with shares still 40% below their 2021 highs. But today's setup is rather different. With revenue and profits compounding at a blistering pace, the stock's forward P/FCF multiple of 61x for 2025, falling to 37x by 2027, appears to be downright reasonable given the pace. In particular, consensus forecasts see free cash flow hitting $1.95 billion this year, $2.46 billion in 2026, and $3.20 billion by 2027. Notably, superb free cash flow should open room for capital return prospects, which Shopify hasn't really explored thus far. As the cash pile grows, management could start returning capital via buybacks or even dividends, which could attract a new cohort of investors to the stock. With the company's net cash position already at a considerable $5.3 billion and tons of cash expected to flow in the coming years, I believe this is an ever-growing possibility. Wall Street's outlook on Shopify is relatively bullish, despite the stock lagging in recent weeks. The stock now has a Strong Buy consensus rating, with 24 analysts currently bullish and 8 staying neutral. Notably, not a single analyst is bearish on the stock. SHOP's average price target is $117.35, indicating an upside potential of 12.5% over the coming twelve months. Shopify's imminent Nasdaq listing and superlative performance results indicate an elegant mix of growth and disciplined spending. The company's ability to scale across online, offline, B2B, and global markets while generating robust cash flows showcases a platform built for endurance. Given the constant reinvention and rollout of features, top-line growth is set to remain vigorous for many quarters to come, and the Q2 guidance for growth in the mid-20s indeed confirms this. Wall Street's free cash flow growth estimates further confirm that Shopify's bottom line is also set to snowball. Add the reasonable valuation and net cash position, and Shopify stock forms a highly compelling case. Disclaimer & DisclosureReport an Issue Sign in to access your portfolio
