Shopify (NASDAQ:SHOP) Trading Down 7% - Time to Sell?

Key Points

• Shares fell about 7% intraday to $155.80 (from a $167.44 close), trading below the 50‑day moving average on volume roughly 41% below its average session.
• Analyst sentiment is broadly positive with a consensus "Moderate Buy" (24 Buys vs. 21 Holds) and a consensus target of $171.61, while several firms raised targets (KeyCorp to $200; Canaccord and Wedbush near $185).
• Shopify beat Q3 estimates (EPS $0.27 vs $0.24; revenue $2.84B vs $2.75B) but still carries a high valuation (P/E ~115.5) and about 69% institutional ownership.

Shopify Inc. (NASDAQ:SHOP - Get Free Report) TSE: SHOP shares fell 7% during mid-day trading on Wednesday . The company traded as low as $155.40 and last traded at $155.80. 2,848,323 shares were traded during mid-day trading, a decline of 41% from the average session volume of 4,818,289 shares. The stock had previously closed at $167.44.

Wall Street Analyst Weigh In

Several research firms have recently weighed in on SHOP. KeyCorp boosted their price target on Shopify from $175.00 to $200.00 and gave the stock an "overweight" rating in a report on Thursday, October 30th. Zacks Research lowered shares of Shopify from a "strong-buy" rating to a "hold" rating in a report on Wednesday, November 12th. Canaccord Genuity Group raised their price target on shares of Shopify from $165.00 to $185.00 and gave the company a "buy" rating in a research note on Tuesday, November 4th. Benchmark reiterated a "buy" rating on shares of Shopify in a report on Wednesday, December 3rd. Finally, Wedbush reissued an "outperform" rating and issued a $185.00 price objective (up previously from $160.00) on shares of Shopify in a research note on Tuesday, November 4th. Twenty-four investment analysts have rated the stock with a Buy rating and twenty-one have assigned a Hold rating to the stock. According to data from MarketBeat.com, the company has an average rating of "Moderate Buy" and a consensus target price of $171.61.

Shopify Trading Down 6.9%

The firm's 50-day moving average price is $160.05 and its 200 day moving average price is $148.90. The company has a market cap of $202.94 billion, a price-to-earnings ratio of 115.47, a P/E/G ratio of 4.99 and a beta of 2.83.

Shopify (NASDAQ:SHOP - Get Free Report) TSE: SHOP last released its earnings results on Tuesday, November 4th. The software maker reported $0.27 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.24 by $0.03. The company had revenue of $2.84 billion for the quarter, compared to the consensus estimate of $2.75 billion. Shopify had a net margin of 16.65% and a return on equity of 11.72%. Analysts forecast that Shopify Inc. will post 1.12 earnings per share for the current fiscal year.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Twin Peaks Wealth Advisors LLC increased its position in shares of Shopify by 1.7% during the third quarter. Twin Peaks Wealth Advisors LLC now owns 3,448 shares of the software maker's stock valued at $512,000 after acquiring an additional 59 shares during the last quarter. Accurate Wealth Management LLC boosted its holdings in shares of Shopify by 2.0% in the 3rd quarter. Accurate Wealth Management LLC now owns 3,438 shares of the software maker's stock worth $526,000 after buying an additional 67 shares during the last quarter. Moloney Securities Asset Management LLC grew its position in Shopify by 1.8% during the third quarter. Moloney Securities Asset Management LLC now owns 3,951 shares of the software maker's stock valued at $587,000 after buying an additional 70 shares during the period. Seros Financial LLC increased its holdings in Shopify by 2.7% during the third quarter. Seros Financial LLC now owns 2,856 shares of the software maker's stock worth $424,000 after buying an additional 75 shares during the last quarter. Finally, Sivia Capital Partners LLC raised its position in Shopify by 0.9% in the third quarter. Sivia Capital Partners LLC now owns 8,265 shares of the software maker's stock worth $1,228,000 after acquiring an additional 75 shares during the period. Institutional investors own 69.27% of the company's stock.

Shopify Company Profile

Shopify is a Canadian commerce technology company that provides a cloud-based platform for businesses to create, manage and scale online and physical retail stores. Its core offering is a software-as-a-service e-commerce platform that enables merchants to build customizable storefronts, manage product catalogs, process orders, and handle inventory. Shopify also supports omnichannel selling through integrated point-of-sale (POS) systems for in-person transactions.

Beyond storefront software, Shopify offers a range of merchant services and tools designed to simplify commerce operations.

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