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Shopify Stock Extends Slide. Where Shares Could Go From Here.

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Shopify stock has slumped as of late, and Goldman analyst Gabriela Borges sees “a period where growth is decelerating and [pretax] margin is trending lower.”

Andrew Harrer/Bloomberg

Always volatile,


stock has slumped 18% over the last four weeks, as investors continue to flee high-multiple software stocks generally—and Covid-era winners in particular.

Adding to the pressure on Shopify (ticker: SHOP) stock on Monday, Goldman Sachs analyst Gabriela Borges picked up coverage of the e-commerce software company with a Neutral rating. The call was part of a broader launch on “emerging software” stocks, which included adding the experience management software company

Qualtrics International

(XM) to the firm’s Conviction List with a Buy rating.

Other stocks launched with Buy ratings include




), a provider of tax-compliance software; Shopify rival

BigCommerce Holdings

(BIGC); spend management-software company

Coupa Software

(COUP); and marketing-software specialist




). Other Neutral-rated names include


(KLTR), which provides cloud-based video tools, and

Paycor HCM



), a seller of HR software for small- and medium-size businesses. She started

PowerSchool Holdings

(PWSC), which sells software to the K-12 education market, with a Sell rating.

As for Shopify, she says the company is well-positioned long term, but she sees near-term headwinds. For one thing, Borges says that a recent slowing of gross-merchandise-value growth coming out of the pandemic isn’t likely to reverse for at least the next two to three quarters. And she says margins are likely to trend lower in 2022, as the company invests in strategic initiatives to grow its range of services.

“While we view initiatives such as fulfillment as solving a critical pain point for customers, they will likely require continued elevated investment,” she writes. “The stock will likely be range-bound in a period where growth is decelerating and [pretax] margin is trending lower.”

The stock most affected by Goldman’s call on the group is PowerSchool, which is down 14.7% Monday to $17.15. The analyst writes that she sees the company as “a dominant provider of student information-and-learning management systems in K-12 in North America,” but that the stock has been trading at a premium to other education sector shares, and that the company already serves more than 70% of K-12 students in 93 of the top 100 U.S. school districts. She says further growth will require M&A and cross sell into the existing base. Her target on the stock is $17.

Shopify stock is down 4.3% to $1,399. Qualtrics stock is up a penny to $33.58.

Write to Eric J. Savitz at [email protected]

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