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Wish (NASDAQ:WISH) has been a recent topic of conversation among retail investors and has been trading on much higher volume ever since “meme stocks” cycled back around in early June. But is there a long term value in the stock, or are traders only buying for the short term?

Fundamentals

Let’s compare Wish to some other companies alike, such as Shopify (NYSE:SHOP). They released their IPO in 2015 and had a steady return for a few years. The stock took a hit during the beginning of the pandemic, but since has gone parabolic after reporting blowout earnings for Q1 of 2020. They have thrived as an online business when many countries added lockdown restrictions that kept people at home. Shopify is currently up over 400% since the March lows, after increased demand in the online space. Wish released their IPO in December 2020, but has seen changes in share price in recent months. Is a large move a possibility for Wish as well?

Another company to note is Pinterest (NYSE:PINS). How does Wish compare?

  • PINS Market Cap of $38B vs WISH Market Cap of $6.5B
  • PINS $1.6B Revenue vs WISH $2.5B Revenue
  • PINS 454M Users vs WISH 500M Users

Expected revenue for 2021 is $3.25B, whilst cash on balance sheet is over $2B. The stock only trades at 2.6 times revenue, and 2 times expected revenue for this year. Comparatively, Pinterest is at 17 times their revenue for 2020. Wish is the third most downloaded e-commerce app in the world for 2020, only falling short to Amazon (NASDAQ:AMZN) and Shopee.

Technicals

The share price is currently just above $10 at the time of writing. There is heavy resistance at $15, having tried to break this early in June and then again at the end of the same month. The stock found support at $9, with earnings due on the 12th August. Should $15 be reached again, I could see the stock gaining momentum to reach $20 not long after. Short interest is at 6.59%. $33 is currently the yearly high, and not an unreasonable target to see before the close of the year.

Chart provided by TradingView

Overview

I believe this stock has potential to do very well short term due to the “meme stock” interest and key levels. But I also think Wish can be one to be patient with for a longer term investment, and even greater returns. The online shopping space is rapidly growing, and Wish stands out as the main e-commerce space for low budget items. Wish is used worldwide, and has the potential to be a top name in a few years, alongside the likes of eBay (NASDAQ:EBAY) and Shopify. If earnings turn out poor, there could be lower prices seen as fear kicks in for retail investors. This could be a great buying opportunity with an even better risk/reward. On the other hand, a strong earnings report could give Wish the momentum needed to break $15 in the short term.

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