1 Green Flag For Shopify in 2022, and 1 Red Flag
Shopify (NYSE: SHOP) was a massive beneficiary of the coronavirus pandemic. Government-mandated closures of nonessential businesses for in-person shopping boosted e-commerce spending. As a result, companies that previously neglected developing an online presence were forced to do so if they wanted to generate sales.
The development is unlikely to reverse. Businesses will not likely cancel or shut down the websites and apps they paid to create during the pandemic. The more extensive customer base could be a green flag for Shopify this year.
Meanwhile, the company, realizing the needs of its client base has grown substantially since the pandemic onset, is investing aggressively to serve those needs. The acceleration of capital investments and expenses that it will require could be a headwind for Shopify in 2022. Already, investors have signaled that the red flags for Shopify outweigh the green flags, and the stock is down 56% so far in the year.
Source Fool.com
