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Why is ContextLogic Soaring Again?

The parent company of e-commerce app Wish saw shares burgeon after it announced a new partnership deal.

Source: Bloomberg
  • ContextLogic Inc (NASDAQ: WISH) share price closed 13% higher on Monday (14 June 2021)
  • The rally came on the back of a new partnership deal with French e-commerce platform PrestaShop
  • Last week, the parent company of e-commerce app Wish saw its stocks skyrocket 85% amidst talks of higher price target potential on social media
  • Analysts see a 103% upside on the stock in the next 12 months, the latest data show
  • Ready to trade ContextLogic shares? Open an account today

ContextLogic stock price: What’s the latest?

ContextLogic shares closed 12.7% higher on Monday, after it announced a two-year partnership with French e-commerce platform, PrestaShop.

The counter registered a trading volume of 181 million shares, compared to a 65-day average of 28 million.

Wish, owned and operated by ContextLogic, will be named an official ‘Trusted Partner’ status on PrestaShop. It will also be given a special landing page on the PrestaShop platform for merchants.

Meanwhile, more than 300,000 merchants and brands on the PrestaShop platform will have access to consumers on the Wish marketplace.

PrestaShop merchants will have free access to a direct integration module on the PrestaShop platform that connects them directly to Wish’s merchant dashboard. The module will sync their products and orders between PrestaShop and Wish.

PrestaShop merchants will also benefit from a suite of additional marketing and sales support and a number of special incentives.

Why the stock soared 85% last week

Last week, the e-commerce company saw its stock price skyrocket 85% as retail traders piled into the stock following discussions across various social media channels about the possibility of it hitting price targets well above existing levels.

The stock’s daily trading volume on 08 June 2021 hit 175 million, which was well above the average of just around ten million a day.

It was also the top trending stock on the day on trading-centric social network StockTwits.

What’s the outlook on the stock?

Last month, ContextLogic reported ‘stronger-than-expected’ first quarter of 2021 financial results, with revenue growing 75% year-on-year to US$772 million.

Then on 13 May, Credit Suisse analyst Stephen Ju maintained a ‘buy’ rating on the stock while cutting his price target to US$24 from US$31.

His lower price target was predicated on the company’s delayed growth trajectory for the second half of 2021. He did however note the better-than-expected revenue and adjusted EBITDA thanks to higher AOVs and improved logistics performance.

Stifel analyst Scott Devitt also lowered his firm's price target on ContextLogic to US$12 from US$20 following the quarterly results, while reiterating a ‘hold’ rating.

The analyst readjusted his intermediate and long-term growth assumptions for the platform’s core marketplace revenue, citing the company’s decision to reduce marketing investments in certain geographies and his projections for slower MAU growth than previously stated.

Analyst sentiments published by MarketBeat show an average rating of ‘buy’ and price target of US$22.92 on the stock. This implies a 103.4% upside potential from ContextLogic’s last traded price of US$11.27.

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