After being one of the best-performing stocks in the entire market, Shopify has given back a big chunk of its post-pandemic gains. Overall, the stock is down 77% from it's all-time highs set in November of last year. Shares are now only 33% above what they were in March 2020. Even after these losses, the stock remains quite expensive with a $55 billion market cap and little under $5 billion in revenue.
Inside the Numbers
In Q1, Shopify reported adjusted earnings of $0.20 per share which fell short of expectations of a profit of $0.63 per share. Revenue was up 22% to $1.2 billion which was also slightly short of expectations of $1.24 billion.
Deliverr is a startup that provides fulfillment services to eCommerce vendors selling on major platforms like Amazon
An interesting thing happened on Twitter
The reality is less about analyst and more of a "vibe shift" in the markets as absurd as it sounds. But, it's the same reason that oil stocks are now trading with momentum, while tech stocks are crashing. And, it's an inverse of the last decade.
No better example than the market's reaction to the $2.1 billion acquisition. This wasn't as meaningful of an amount for the company a few months ago. It's also not surprising that investors had a negative reaction to the news as the old playbook of being rewarded for revenue growth is no longer applicable. Instead, companies are targeting free cash flow. Thus, there has been weakness in nearly every e-commerce and Internet stock.