CA - Shopify: Buy This Deep Pullback Potential Double Digit Growth Ahead

2024-05-24 16:00:00 ET

Summary

• SHOP has pulled back drastically since the recent earnings call, presenting a massive buying opportunity near to our previous recommended entry point of $65s.
• We believe that the market has over-reacted, since the SaaS company's FQ1'24 operating margins and FQ2'24 guidance still suggest profitable growth trend after the logistics business divestiture.
• SHOP's sticky consumer base, robust monthly recurring revenue/ subscription growth, and international opportunities make it a compelling buy.
• Combined with the healthier balance sheet, the stock is likely to be well supported at $58s while offering an expanded upside potential over the next few years.

We previously covered Shopify Inc. ( SHOP ) in February 2024, discussing its excellent FQ4'23 earnings call while concluding that its profitable growth trend and growing leadership in the US e-commerce SaaS market might never come cheap after all....

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