2024-04-23 10:22:32 ET
Summary
- Shopify's financial growth is impressive, but investors should exercise caution due to the company's current valuation.
- The company's cost-cutting measures and improved free cash flow are positive indicators, but slowing top-line growth is a problem to date.
- SHOP's closest peer's EPS is projected to grow at a CAGR of 32.6%, compared to 20.45% of SHOP's EPS growth over the same period. The peer is 2x cheaper.
- I think SHOP is trading at a huge premium to other peers, without a sufficient margin of safety to buy today and hold with little worry.
- I recommend waiting for lower prices - perhaps a 20-25% correction is an excellent zone to enter a long position. I rate SHOP as a "Hold".
My Thesis
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Shopify Stock: Don't Buy The Dip Just Yet