SQSP - Shopify: Valuation Is Getting Ahead Of Itself (Rating Downgrade)
2024-01-23 15:48:08 ET
Summary
- Shopify saw a record high in operating profits last quarter while maintaining double-digit revenue growth, catapulting the stock price to new highs since 2022.
- The company has focused on improving efficiency and has made layoffs and strategic business decisions to align with the AI revolution.
- The stock is up more than 170% since our Buy rating, making it one of our most successful investment ideas.
- Despite its success, we believe Shopify's valuation is too high, and we believe that investors should begin to reduce exposure.
Investment Thesis
Shopify ( SHOP ), a Canadian e-commerce giant, is on a run the last few quarters, with new record highs in operating income while still posting very high double-digit revenue growth in excess of 25% YoY. Since our Buy rating at $29.75, Shopify is up 170.89% in less than 15 months, making it one of our most successful investment ideas of the past two years....
Shopify: Valuation Is Getting Ahead Of Itself (Rating Downgrade)