DailyPlay – Opening Trade (SHOP) – March 12, 2025

SHOP Bullish Opening Trade Signal

Investment Rationale

Shopify Inc. (SHOP) has been a long-standing pick in the research report and has delivered strong performance since its addition. Following a strong breakout above $90 and an extended period of sideways consolidation, the stock has now returned to the breakout level. This $90 range offers an attractive risk-reward opportunity for adding to or initiating a position.

Shopify is fundamentally modestly undervalued, with an EV to forward revenue ratio of 12x, roughly 50% higher than its peers. This valuation is supported by Shopify’s significantly stronger growth metrics, including an impressive EPS growth of 185% and revenue growth of 21%, compared to the industry averages. 

Shopify’s forward PE ratio stands at 66.71x versus the industry average of 27.07x, while its expected EPS growth is 35.82% compared to 13.68% for its peers. Additionally, Shopify boasts expected revenue growth of 21.64% versus the industry average of 8.59% and maintains net margins of 23.08%, outperforming the industry average of 17.83%.

SHOP – Daily

Trade Details

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish Credit Spread

Details: Sell to Open 3 Contracts SHOP April 25 $92/$80 Put Vertical Spreads @ $4.39 Credit per Contract.

Total Risk: This trade has a max risk of $2,283 (3 Contracts x $761) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $761 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bullish trade on an stock that is expected to bounce higher off recent support.

1M/6M Trends: Bearish/Mildly Bearish

Relative Strength: 10/10

OptionsPlay Score: 89

Stop Loss: @ $8.78 (100% loss to value of premium)

View SHOP Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Tuesday ‘s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View SHOP Trade