What’s behind Shopify’s sliding stock?

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What’s behind Shopify’s sliding stock? GlobeTechnology

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At their high point in August, the shares were up as much as 187 per cent in 2019 as analysts raised their target prices to keep up. The average analyst target price more than doubled to $470, up from about $220 at the start of the year, according to Bloomberg. With pessimism evaporating and enthusiasm building, the shares may have been priced to perfection – a condition that has also been weighing on stocks such as Netflix Inc. and Amazon.com Inc. Shopify has not reported a full year of profit, but its valuation can be gauged by comparing the share price with annual sales – and the ratio is very high.

To be sure, Shopify’s strong growth helps offset its hefty valuation to some extent. It recently expanded its operations by introducing its own, which is essentially a collection of warehouses that can offer storage and shipping services.

 

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