- Shopify is one of the best and most solid of the growth stocks with low current earnings and an extremely high valuation.
- Rising interest rates have undercut the premise of these stocks by reducing the properly discounted value of distant future earnings.
- The most recent shoe to drop was 4Q earnings which came with guidance including future earnings deceleration as the pandemic boost ends.
- SHOP has a great business model in which accounts receivable are paid automatically, and Shop Pay is a recent growth area; it helps customers in many ways, including lower shipping costs.
- Shopify may not recover quickly, but if high growth resumes and valuation declines a little more, it could be a survivor and a good long term holding. Don't buy much right now.
For further details see:
Shopify's Stock Price Was Down Almost 50% In January; Should You Buy Or Sell?