Brendan Caldwell Shopify Inc. SHOP-T COMMENT Dec 30, 2024

In his momentum mandate. E-commerce turnkey solution for small- and medium-sized businesses. Biggest market share in e-commerce enablement. E-commerce will continue to take market share from bricks and mortar. As it expands capabilities, "take rate" will grow faster. Timely time to own.

One of only Canadian holdings. Very strong eCommerce company. Founder led which is a great sign. Unsure on how A.I. will impact business. Will continue to own shares. 

Never owned it. After it went public, it was growing revenue at 80%, but was unprofitable. He can't value a company losing money. But SHOP Is shifting: revenue growth is falling as margins rise. It trades at 103X PE, which is not good considering their growth rate.

Very volatile. Options are very expensive. Sell puts $165 April for around $5. 

In his momentum mandate. Increasingly catering to large-enterprise customers, not just small and medium players. Lots of admiration for the business model.

Doesn't think it will start a dividend. You actually don't want companies to pay dividends when there are still so many growth opportunities. Investor Day listed 5 areas ripe for growth, problem is market's already pricing this in. Trading ~100x PE, too expensive for him.

Down ~30% from recent highs, but still above 200-day MA, which is also moving higher. Technically, shares still look sound. Pricey at 61x forward PE for 20-25% earnings growth, a PEG ratio of 2.5x. He prefers US names for tech.

The stock has been volatile, as all growth stocks have been recently. We think merchant customers and the company can adapt well enough. However, the consumer spending impact of tariffs remains a variable. Consumer confidence has dropped, and if tariffs induce inflation then business may certainly be negatively impacted overall. Silver linings might be valuation (better of course with the decline) and sentiment (market sentiment is so bad currently any good news could amplify moves). It remains a high Beta stock. Down 11% YTD, it has actually held up better than many others.
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Pullbacks are great opportunities to add. Continues to invest in R&D. Payments is a big growth vector, still available in only a handful of countries. Secular rise in e-commerce still has room to run.

Growth company that hasn't been smashed, despite coming down from highs. Flirting with getting into the NASDAQ 100; if it goes down there, will be a lot more buying. Last quarter earnings were good, subscription revenue up, and executing well. But it's pricey.

Must-own name, but you have to buy it at the right level. Very whippy, use the technicals to buy.