Can Royal Mail shares climb higher?
Royal Mail (LSE: RMG) shares hit one of their highest levels since the companys IPO last month. The stock reached 590p, below its all-time high of 630p printed in May 2018. Shares in the company have jumped following the surge in parcel deliveries over the past 14 months. Royal Mail has risen to the challenge and introduced some significant changes to its operations to facilitate higher delivery volumes. 5G is here  and shares of this sleeping giant could be a great way for you to potentially profit! According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air And if you click here well show you something that could be key to unlocking 5Gs full potential... The company has also been investing in improving its operations. Management has outlined plans to spend hundreds of millions of pounds modernising operations and automating processes over the next few years. However, while Im incredibly excited about the companys planned changes, Ive recently turned cautious on the stock. Overheating  I think Royal Mail shares have been a tremendous investment, but I believe the stock has risen too far, too fast. The pandemic isnt yet over, but there are some signs that the online retail boom, which took place last year, has started to moderate. With brick-and-mortar stores back open, consumers have more options. Consumers are also allowed to travel around the country again, which means they can deliver packages personally, rather than having to rely on Royal Mails service. The company itself has also warned that growth could moderate over the next 12-24 months. In the outlook section of its 2020-21 annual results, Royal Mail noted: As the outlook for 2021-22 contains a number of uncertainties that could significantly influence volumes and costs it is difficult to provide specific guidance for 2021-22.  I think 2021 is likely to be a year of change for the group. By investing more, Royal Mail will be able to build a business for the future. This will come at a cost, but it should yield results in the long run. Its also making more changes to the way it operates. Earlier this week, rumours emerged that the group is planning to introduce timed delivery slots for customers. Many of the companys competitors already offer this service. Royal Mails decision to enter this part of the market shows its serious about taking on these firms. Risks of owning Royal Mail shares  Unfortunately, the company will need to do more than offer customers delivery slots to maintain its competitive advantage. Itll need to keep investing to meet customer demands. With competitors snapping at Royal Mails heels, it needs to stay on top, or it could be left behind. Considering all of the above, I think the stock will struggle to continue to move higher, so I wouldnt buy Royal Mail shares today. As of yet, its unclear how the delivery and e-commerce markets will emerge from the pandemic. Whats more, I think the company will have its work cut out over the next 12-24 months as it focuses on building on the lessons of the past year. Therefore, Im happy to wait on the sidelines until the companys transition is complete.