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Shopify shares slide on Wedbush downgrade

Published Dec 06, 2023 10:53 Updated Dec 06, 2023 11:15
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© Reuters. Shopify shares slide on Wedbush downgrade
 
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Proactive Investors - Shopify (TSX:SHOP) Inc (TSX shares took a hit on Wednesday morning after Wedbush analysts lowered its rating to Underperform on the Canadian eCommerce stock.

Analysts came away from Shopify’s Investor Day with a bearish view on the stock, citing “limited room for further multiple expansion.”

“While we continue to hold a favorable view of Shopify's overall strategy and competitive positioning within eCommerce, shares have risen +53% since the company reported 3Q23 results on November 2nd and now trade at a significant premium relative to software peers across key valuation metrics,” Wedbush analysts wrote in a note.

Wedbush analysts were zeroed in on the company's long-term strategy, competitive positioning, and potential growth drivers at Investor Day. Despite increased confidence in Shopify's market share expansion, they found no significant changes to the long-term Total Addressable Market (TAM) and monetization outlook.

Shopify's stock is trading at a premium compared to peers, especially in terms of valuation metrics, Wedbush noted.

The revised target price of $68 reflects concerns about the current valuation.

While the outlook for Shopify remains positive, the analysts recommend exploring other eCommerce opportunities for potential upside, particularly Amazon (NASDAQ:AMZN, Outperform) and MercadoLibre (NASDAQ:MELI, Outperform).

Both US-listed and Canadian-listed shares of Shopify were down 2.7% by midmorning.

Read more on Proactive Investors CA

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Shopify shares slide on Wedbush downgrade
 

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