3. Shopify Inc. (NYSE:SHOP)
Average 3-month Volume as of February 6: 21.29 million
YTD Share Price Gains as of February 6: 46.95%
Number of Hedge Fund Holders: 62
Shopify Inc. (NYSE:SHOP) is a Canadian commerce company that offers a commerce platform and services in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. On January 3, Shopify Inc. (NYSE:SHOP) launched a new integration aimed at large retailers. The Canadian e-commerce company stated that its new Commerce Components will enable big retailers to incorporate parts of Shopify into their own current systems. This move is a significant step towards establishing partnerships with major retailers and increasing the appeal of its technology for smaller retailers and sellers.
On February 1, Scotiabank analyst Kevin Krishnaratne initiated coverage of Shopify Inc. (NYSE:SHOP) with a Sector Perform rating and a $43 price target. The analyst thinks that Shopify Inc. (NYSE:SHOP) should be a key technology holding because it is a leading player in the process of transforming the retail industry. However, the neutral rating reflects the stock’s high valuation following a 40% increase in its value this year, as well as its proximity to double the September lows. The analyst wrote in its research note that while the recent rise in subscription plan prices might result in some upward revisions to revenue estimates for the Subscription Solutions division, there are still risks to revenue for the Merchant Solutions division because of declining consumer spending trends.
According to Insider Monkey’s data, 62 hedge funds were long Shopify Inc. (NYSE:SHOP) at the end of the third quarter of 2022, compared to 60 funds in the prior quarter. Cathie Wood’s ARK Investment Management is the largest position holder in the company, with 14.5 million shares worth $391.50 million.
Artisan Partners made the following comment about Shopify Inc. (NYSE:SHOP) in its Q3 2022 investor letter:
“Shopify Inc. (NYSE:SHOP) is a leading e-commerce platform supporting over 2 million merchants with software, online storefronts and payments technology. Like Uber, Shopify returned to mid-cap territory during Q2 as the company’s profit cycle and share price have faced significant pressure. Earlier this year, the company began a phase of investments to support a range of future growth drivers, including Shopify Plus for larger brands, logistics services, international expansion, point-of-sale payments and social media-based commerce. With high inflation putting pressure on consumer spending, and with e-commerce activity normalizing after a massive pandemic spike, Shopify’s earnings have fallen sharply. While we have outstanding questions about the likelihood of success for the company’s capital-intensive logistics investments, we decided to take advantage of the stock’s >75% YTD decline and initiate a GardenSM position at a deep discount to our PMV estimate. Our thesis is predicated on our belief there is still a long runway for commerce to move online, and Shopify is well-positioned to win share of this market. The company has created an ecosystem of products (payment processing, financing, shipping, customer engagement tools, etc.), partners (TikTok, Google, Meta), sales channels and over 6,000 apps to help its merchants sell online and establish direct relationships with customers.”
