Call Traders Flock to This Online Clothing Leader

SHOP remains 80% off its all-time high

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Shopify Inc. (NYSE:SHOP) is a Canadian e-commerce company with a market cap of $44.15 billion. SHOP's platform offers essential internet infrastructure for retail businesses of all sizes, providing millions of sellers across more than 175 countries with a suite of services including payments, marketing, shipping, and customer engagement tools. The e-commerce platform hosts brands such as Allbirds, Gymshark, Heinz, Tupperware, FTD, Netflix, and FIGS. AT last glance, SHOP is trading up 0.3% at $34.87.

Furthermore, on Sept. 8, Shopify announced some major changes in the company’s leadership team. These changes include the promotion of Kaz Nejatian, from V.P. of Product to Chief Operating Officer, and the appointment of Jeff Hoffmeister as Chief Financial Officer. Hoffmeister will join Shopify after spending over two decades in Morgan Stanley’s Technology Investment Banking group.

Shopify stock price has experienced about a 77% decrease over the past 12 months and is down 80% since peaking at an all-time high of $176.29 last November. Additionally, Shopify stock has declined in price 74% year-to-date and10% just over the past month.

Shopify stock also trades extremely rich at a price-earnings ratio of 267.77 and a price-sales ratio of 8.83. The e-commerce business is also expected report -$0.15 in earnings for fiscal 2022, signaling a $0.99 decline in EPS (earnings per share) from the $0.84 reported for fiscal 2021.

However, SHOP remains an intriguing growth play despite its struggle with profitability. In addition, Shopify maintains a favorable balance sheet with $6.95 billion in cash and $1.19 billion in total debt. Altogether, the e-commerce business is well positioned for continued growth, and, with unprofitability seemingly being a short-term issue, Shopify stock offers an attractive opportunity from a risk-reward perspective.

What's more, calls are being favored in the options pits, per SHOP's 50-day call/put volume ratio of 1.92 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that stands higher than 80% of readings in its 12-month range. Echoing this, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.74 stands higher than just 16% of readings from the past year, indicating a bias for bullish bets amongst short-term options traders.

 
 

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