Q: Last week you rated SHOP as a top growth pick among Canadian companies. The past 24 hours has been a roller coaster ride. After pretty good earnings and then the sell-off, do you still rate SHOP as one of your 2 top growth picks? I might suggest a quick report bringing all the information from all the questions into a single brief document. An overall assessment would be helpful as a lot has happened with their financials and the market reaction. Quite puzzling.
5i Research Answer:
SHOP has always been a volatile stock, and that is nothing new. We are aiming for long term selections, and nothing in the quarter has changed our positive view on the stock. Focusing on fundamentals can help investors manage volatility. Guidance calls for continued growth. There is a $2B buyback. The balance sheet is flush with cash. In a different week, without the current AI scare, the stock might have risen (as it did initially, up $17). We would not want to react just because a volatile stock continues to be volatile. Being in a semi-oligopolistic position in its sector can be a big advantage.