High Inflation is Crushing These 5 Stocks

2. Shopify Inc. (NYSE:SHOP)

Number of Hedge Fund Holders: 72

Shopify Inc. (NYSE:SHOP) is a Canadian e-commerce company that operates its platform in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. Shopify Inc. (NYSE:SHOP) stock has plunged over 70% year to date as of August 10 as customers budget their expenses and decrease discretionary purchases. The stock still seems extremely overvalued as it is trading at 9x revenues. On August 10, DZ Bank analyst Axel Herlinghaus downgraded Shopify Inc. (NYSE:SHOP) to Hold from Buy. Similarly, the stock was downgraded by KGI Securities analyst Freddy Chan to Neutral from Outperform on August 5. 

According to Insider Monkey’s data, 72 hedge funds reported owning stakes in Shopify Inc. (NYSE:SHOP) at the conclusion of Q1 2022, down from 86 funds in the prior quarter. Stephen Mandel’s Lone Pine Capital is a significant shareholder of the company, with a position worth $699 million. 

Here is what Rowan Street has to say about Shopify Inc. (NYSE:SHOP) in its Q2 2022 investor letter:

“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.”