Q: Shopify stock has declined by over $100, from a high of $253, in Oct,25 to $150, now.
What is causing the outsized drop and negative sentiment ?
Even today when the entire Tech sector bounced back nicely in Friday's trading, SHOP has lagged the market and continues its downtrend of several weeks with a red tape.
Do you think strong earnings, next week could change the scene ?
Thank You
What is causing the outsized drop and negative sentiment ?
Even today when the entire Tech sector bounced back nicely in Friday's trading, SHOP has lagged the market and continues its downtrend of several weeks with a red tape.
Do you think strong earnings, next week could change the scene ?
Thank You
5i Research Answer:
Certainly strong earnings (and outlook) would help. SHOP had been weak generally prior to this week, but not really on any news. The Anthropic AI news hit the stock early this week, though we don't think the impact should have been as much as it was. There has been no negative company news and many brokerages have come out and supported it in the past 10 days. The stock was up with the market on Friday but then scaled back. But we would not put too much emphasis on one day of trading. Still, it is down 32% this year which seems harsh based on analysts' estimates and outlook.