Analysts are Cutting Price Targets of These 5 Tech Stocks After Earnings

2. Shopify Inc. (NYSE:SHOP)

Number of Hedge Fund Holders: 72

Deutsche Bank decreased its price target for Shopify Inc. (NYSE:SHOP) from $50 per share to $40 per share on Thursday, July 28, 2022. According to Deutsche Bank analyst Bhavin Shah, the company’s Q2 performance and a decision to cut 10 percent of its global workforce indicate that e-commerce trends are normalizing.

Shah added that Shopify’s sales growth would likely be weighed down by inflationary pressure and normalizing e-commerce trends in the coming quarters.

Meanwhile, Shopify Inc. (NYSE:SHOP) missed profit and sales expectations for the second earlier this week. The Ontario-based company reported an adjusted loss of 3 cents per share, contrary to analysts’ average estimate for a profit of 2 cents per share. In addition, Shopify Inc. (NYSE:SHOP) posted revenue of $1.3 billion, below the consensus of $1.33 billion.

Separately, Shopify Inc. (NYSE:SHOP) appeared in the second-quarter 2022 investor letter of investment management firm Rowan Street Capital LLC. Here’s what the firm said:

Tobias Lutke, Shopify (NYSE:SHOP) Founder and CEO

When Tobias Lütke opened an online snowboarding store in 2004, he realized how painfully cumbersome e-commerce software was. So he decided to create Shopify – a platform that made it easy for anyone to open up an online store.

Tobi has built Shopify into one of the most popular e-commerce platforms in the world, with $175 billion in GMV (Gross Merchandise Value) and $4.6 billion in revenues in 2021. SHOP went public in 2015, when revenues were just lightly above $200 million, and the stock is up 1,233% since its IPO. Shopify stock peaked in November 2021 (traded at astronomical 47x sales), which coincided with peak enthusiasm for the tech-driven, “stay-home” stocks. Since then, the stock is down almost 80% and is currently trading at just 6x 2023E sales. We believe that Mr. Market is offering us an exceptional value, at current price levels, for an exceptional company led by a very talented, visionary founder/CEO.”