Q: I see Piper Sandler just issued a SELL rating for SHOP. The stock has been weaker than the overall market the past few weeks. Is there anything out there that is causing the drop? What factors are at play here? Is it still one of your favourites?
5i Research Answer:
Piper has had a SELL on SHOP since November, and only re-iterated its rating. It has concerns on margins and consumer spending. We still like it quite a lot, but it is not risk free. It is up 62% in a year, and a miss in earnings would see profit-taking for sure. But estimates have been rising recently, margins should expand later in '24, and its last quarter was a solid 'beat'. We think the outlook remains good. Consensus still calls for 30%+ growth in the next year.