2024-04-29 08:30:00 ET
Summary
- I cautioned Shopify investors to be wary in early February. SHOP stock has plunged into a bear market.
- Shopify's ability to improve its guidance will be likely assessed.
- SHOP needs to demonstrate improved growth momentum with enterprise customers.
- Shopify also needs to make sure it balances its investment needs with improvement in profitability metrics.
- I explain why SHOP stock is positioned well as Shopify heads into its Q1 earnings release in early May.
I Cautioned Shopify Investors Were Too Optimistic
Shopify Inc. ( SHOP ) investors head into Shopify's Q1 earnings release with less enthusiasm than the fervor observed in Shopify's fourth-quarter earnings release in February 2024. I presented a pre-earnings discussion on Shopify's Q4 earnings in early February, arguing why SHOP buyers were too optimistic. As a result, I urged caution on SHOP stock, downgrading it to a Hold. Accordingly, SHOP has dropped more than 16% since my previous update, significantly underperforming the S&P 500 ( SPX ) ( SPY )....
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Shopify: Inflection Point Likely Arrived As Fears Peaked (Rating Upgrade)