{"id":37214,"date":"2023-07-18T08:28:42","date_gmt":"2023-07-18T12:28:42","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/shopify-stock-has-doubled-time-for-a-downgrade\/"},"modified":"2023-07-18T08:28:44","modified_gmt":"2023-07-18T12:28:44","slug":"shopify-stock-has-doubled-time-for-a-downgrade","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=37214","title":{"rendered":"Shopify Stock Has Doubled. Time for a Downgrade."},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-BAR-0000694797\">\n<div data-layout=\"wrap\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetMediaIllustration\n          wrap\n  article__inset\n        article__inset--type-InsetMediaIllustration\n          article__inset--wrap\n    article__inset--lead\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-wrap\n        article__inset__image\n      \" itemscope=\"\" itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:66.66666666666666%;\" data-subtype=\"photo\" class=\"image-container  responsive-media article__inset__image__image\"><\/div>\n<\/figure><\/div>\n<p>\n        Shopify<br \/>\n       stock has zigzagged violently over the last three years.<\/p>\n<p>The e-commerce-software firm\u2019s shares rocketed higher during the pandemic, their valuation increasing five times to peak from trough as sellers of every conceivable good and service added an online store. Then last year, as the economy fully reopened, Shopify stock (ticker: SHOP) gave back all its gains and then some, falling 73%, making it one the year\u2019s worst performers.<\/p>\n<div class=\"paywall\">\n<p>Shopify stock this year reversed course again, rallying nearly 100%, as the company opted to shutter a costly push into logistics, reducing staff by 20% while adding new artificial-intelligence functionality to its software.\u00a0<\/p>\n<p>Evercore analyst Mark Mahaney late Monday reduced his rating on Shopify stock to In Line from Outperform, while keeping his $69 target price, about flat with the stock\u2019s closing level Monday at $68.68. His view is that this year\u2019s robust rally has reduced the stock\u2019s appeal. Mahaney asserts in a research note that this year\u2019s rally was well deserved, driven by stabilizing fundamentals, material cost-control measures, and the shift away from a fully integrated shipping and logistics business model. But Mahaney sees \u201cfew clear catalysts going forward.\u201d<\/p>\n<p>Mahaney notes that the stock now trades for about 11 times forward sales, which he says is higher than all but one other internet stock he follows. That\u2019s a reference to the online advertising platform<br \/>\n        Trade Desk<br \/>\n       (TTD), which he notes has \u201cdramatically higher\u201d margins than Shopify. He notes that Shopify stock is trading for more than 100 times expected 2024 Ebitda, or earnings before interest, taxes, depreciation, and amortization.<\/p>\n<p>Mahaney adds that looking at a basket of software stocks with similar scale and revenue growth, he finds the group trading between nine and 11 times estimated 2024 sales, \u201cwhich doesn\u2019t justify a further rerating for SHOP shares.\u201d And he notes that the basket has gross margins in the 75%-to-85% range, well above Shopify at 48%.<\/p>\n<p>Mahaney writes that the downgrade boils down to a valuation call. He also advises that investors looking for an online retail play at a much more reasonable valuation should consider<br \/>\n        Amazon.com<br \/>\n       (AMZN), trading for about 2 times forward sales.<\/p>\n<p>Write to Eric J. Savitz at eric.savitz@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/articles\/shopify-stock-downgrade-doubled-24ba9a2e?mod=investing\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Shopify stock has zigzagged violently over the last three years. The e-commerce-software firm\u2019s shares rocketed higher during the pandemic, their valuation increasing five times to peak from trough as sellers of every conceivable good and service added an online store. Then last year, as the economy fully reopened, Shopify stock (ticker: SHOP) gave back all [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":37215,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-37214","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Shopify Stock Has Doubled. Time for a Downgrade. | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Shopify stock has zigzagged violently over the last three years. 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