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ContextLogic (WISH) Stock Price Still Low, Has 50% Upside

UTC by Patrick Kariuki · 3 min read
ContextLogic (WISH) Stock Price Still Low, Has 50% Upside
Photo: Wish / Facebook

In the recent past, ContextLogic (WISH) stock has been referred to by market watchers and analysts as the next short-squeeze target.

ContextLogic Inc (NASDAQ: WISH) is the company that’s linked with Wish Mobile, a popular shopping app. The good thing is that the company is not only meme-based but it also addresses emerging and current needs of the e-commerce market. The company confesses that performance, particularly logistics revenue, has been growing impressively. The revenue growth has been increasing gradually but the stock, with a target price of $20, is definitely a buy.

WISH: Just a Meme Stock?

In the recent past, ContextLogic (WISH) stock has been referred to by market watchers and analysts in WallStreetBets Forum as the next short-squeeze target. Two other meme-based stocks, GameStop Corp (NYSE: GME)and AMC Entertainment Holdings Inc (NYSE: AMC) have also done well and become popular on the forum. However, analysts suggest that caution should be observed when dealing with WISH as it may turn out to be another short target. For its total outstanding shares, WISH’s interest ratio, which is a bit low, currently stands at 4%.

ContextLogic became a public-listed company in 2020 with the price of its stock valued at $24 each. However, the initial public offer (IPO) didn’t perform as expected leaving investors disappointed. When the stock started trading, the opening price was $22.75 and even went as high as 32.85 but then started trading low and lower in the following months. The lowest WISH traded was $7.52 before it started drawing attention from WallStreetBets. ContextLogic executives however believe that the company has a lot to offer other than the WallStreetBets mentions and attention.

Client Acquisition and Retention

Being an E-commerce portal, ContextLogic has gained from the pandemic situation. In FY 2020, WISH’s sales increased by 34%. Another 75% sales increase was gained in the first quarter of 2021. The increased downloads of the WISH shopping app were the cause of the improved revenue. Currently, the app has 100 M and above active users each month in over 100 countries.

In 2020 alone, ContextLogic bagged an extra 17M users, and the trend has been growing since. With the discovery and a discount-based experience, WISH is sure to retain its customers for a long time to come. Additionally, the shopping experience is further boosted by the gaming elements that have been embedded on the platform. According to WISH’s market research team, 70% of the company’s sales are impulsive and do not at all involve any search query. Also, 90% of the company’s sales are done via the WISH app.

In this digital age, most people do their shopping online and via mobile applications. From 2019 to 2024, the e-commerce market (global) was expected to increase from $3.4 trillion to $6.3T, and most of the transactions were to be done via mobile apps. This was believed to be possible because most online shopping platforms integrate AI into their businesses, making the shopping experience process safe and secure.

Business News, Market News, News, Stocks, Wall Street
Patrick Kariuki

Patrick is an accounting & economics graduate, a Cryptocurrency enthusiast, and a Blockchain technology fanatic. When not crafting informative pieces on any of the above subjects, he will be researching on how the Blockchain technology can transform the world, particularly the financial space.

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