Shopify stock price falls as the company signals slower growth ahead In 2020, lockdowns were forced upon us. It was a world where many of us were nervous to head outside.
Why did shopify stock go up?
On Sept. 29, Shopify stock rose about 6 percent, likely as a result of investors accumulating the stock in preparation for a second wave of COVID-19. There was no company-specific news that drove the stock up. Article continues below advertisement.
Shares of Shopify (NYSE: SHOP) slid on Wednesday, one day after they reached a record high of $1,134.32. It’s likely that some investors were cashing in on the stock’s recent gains.
Shopify became one of the biggest winners of the pandemic-fueled shift to e-commerce. The company’s stock price surged in 2020 on the back of that momentum.
Why is Shopify stock up 10x since its 2015 IPO?
Shopify’s revenues have increased from around $0.2 billion in FY’15 to about $1.1 billion in FY’18.
Shopify (TSX: SHOP) (NYSE: SHOP) stock benefitted greatly from the lockdowns and the shutdowns. Its e-commerce platform was already starting to take off. As businesses flocked to the e-commerce facilitator, Shopify’s stock price soared.
Should you pay up for Shopify stock?
Historically, paying up for Shopify stock has worked well, given that shares are up over 1,000% in the last five years. However, at the start of this big run-up, Shopify’s price-to-sales ratio (P/S) was only around 15-20, while today it sits at 26. The company is also doing much more in annual revenue now, at $4.
Is Shopify stock overvalued or undervalued?
They’re arguably overvalued (at least in the short term) and due for a correction. We are seeing just this. Shopify stock is down almost 25% from its 2021 highs.
Like many high-growth stocks, Shopify (NYSE: SHOP) has taken a beating over the past three months. Shares are down 42% since late November and are now down almost 25% in the last 12 months. Plenty of smart investors are saying that now is the time to buy the dip on Shopify stock.
What happened to Shopify’s valuation?
As the leader of the tech sector, September’s tech sell-off (which was more pronounced in the U. S. than in Canada) caused Shopify to suffer the most significant drop in valuation. When the stock took off after the market crash, it grew rapidly, and in a matter of months, it was trading in four digits instead of three.
Shopify (NYSE: SHOP) – an e-commerce platform that allows businesses to create and run online stores – has seen its stock soar by close to 10x since its 2015 IPO. The company has two revenue streams – namely Subscriptions (which gives users access to its e-commerce platform and tools) and Merchant Services (which include payments, shipping, etc).