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  5. SHOP: SHOP is really getting cleaned out today. [Shopify Inc. Class A Subordinate Voting Shares]
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Q: SHOP is really getting cleaned out today. How do you see the stock moving in the next few days. How serious is the lighter guidance they offered? Thinking of adding some to position. Are these good prices or best to wait to see where it goes first?
Asked on February 13, 2024
5i Research Answer:

In addition to prior comments, some analysts have expressed concern about lower free cash flow margins in the short term. But it is also a bad market day, on a stock that was up 90% from its October low. The dip is not unique to SHOP nor its own history. We can't really predict any price movements in the 'next few days'. Negative momentum could carry it further down, or it could bottom easily as well. If we ignore the stock and look only at fundamentals (easy to say hard to do) we would consider things quite solid. Overall we would give the quarter/outlook a 7/10 rating. Not perfect, but still solid. The recent price increase seems to have been forgotten about, even though on its last price hike it got 'zero pushback' from customers. We might add a bit here and see if there is any follow through for further adds in the next little while. But keep in mind in a volatile market pretty much anything can and will happen. To put things in some perspective, today's drop only gets the stock back to where it was 12 days ago.