Business & Investment

Shopify (TSX: SHOP) Stocks: Would you like to buy a dip?

Shopify (TSX: SHOP)(NYSE: SHOP) So far, the 2021 stock price has been moving roughly. It decreased by 4.45% annually, decreased by 28% from the record high, and seems to have applied a rough patch. In the years from IPO to today, SHOP has risen by more than 4,000%. For a long time it was an incredible ride. To get to today’s place, SHOP had to overcome the same dips as it is in the midst of today. Therefore, it’s unwise to count Shopify. However, there are risks that investors should be aware of. In this article, we will investigate these risks and try to answer if SHOP is a good “dip buy” at today’s price.

Why SHOP tanks this year

In 2021, Shopify seems to be tanking for two main reasons.

  1. Be expected Revenue slowdown
  2. Wide range of tech stocks sold out

These two factors are interrelated and are ultimately rooted in the COVID-19 pandemic.

Like Shopify Amazon.comIn fact, it benefited from the COVID-19 pandemic rather than being harmed. When retailers were forced to shut down, consumers flocked to online stores like those built with Shopify. Consumers could only shop online because the retail store was closed. As a result, Shopify’s revenue increased 97% year-over-year. As a result, stock prices have risen more than ever. But now, the slowdown in earnings is a real threat. When the economy opens, consumers will be able to choose from more physical stores. The need for online shopping is reduced. In that case, Shopify store sales could decline. Shopify management has recently acknowledged that this is a risk factor for the company, and investors seem to be paying attention.

This is the same basic story as a high-tech sold-out. As of this writing, NASDAQ has fallen about 7% from its highs earlier this year. It could also be due to a pandemic. Many tech stocks gained during the pandemic, as Shopify and Amazon did.Even tech companies that didn’t Directly merit I didn’t lose any money from the pandemic. Apple, Microsoft,and Facebook Even if a pandemic occurred, everything recorded strong earnings growth in 2020. As a result of strong earnings last year, many investors bought stocks, believing they were safer than banks, energy stocks and airlines that were hit hard by the pandemic. But now, tech stocks are very expensive. And the beaten sector needs to get more out of resumption.So the investor Cycling back to value stocks After those more than a year have been at a disadvantage.

Can you recover?

As we have seen, SHOP is currently declining due to expected slowing earnings and weak technology across the sector. Neither of these factors means that the company is inherently less valuable than last year.But investors expect They cause problems.

As for whether they are will It causes problems and we can only wait. Indeed, SHOP’s most recent quarter showed a gradual slowdown in earnings. Revenue grew at 93%. This is astounding, but lower than what SHOP posted last quarter. If the deceleration continues, the SHOP may drop further. But overall, the company has a bright future. The rise of e-commerce is a long-term trend, and the low rates of SHOP mean that it will always establish itself in the industry.

If you like Shopify inventory, you should read this.

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John Mackey, CEO of Whole Foods Market, a subsidiary of Amazon, is a member of The Motley Fool’s Board of Directors. Teresa Kersten, an employee of Microsoft’s subsidiary LinkedIn, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former Facebook market development director and spokeswoman and sister to CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors.Stupid contributor Andrew Button I own shares in Facebook and Microsoft. David Gardner It owns shares in Amazon, Apple and Facebook. Tom Gardner I own shares in Facebook and Shopify. Motley Fool owns and recommends shares in Amazon, Apple, Facebook, Microsoft, Shopify, and Shopify and recommends the following options: And in the long March 2023, Apple received a $ 120 call.

Shopify (TSX: SHOP) Stocks: Would you like to buy a dip? Shopify (TSX: SHOP) Stocks: Would you like to buy a dip?

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