Shopify Inc. (SHOP.TO)

Q3 nice beat across the board. So many different ways to grow this company. So pricey. Need to use the chart to figure out when to buy. Dangerous to be out of it, but you don't want to buy close to its highs.

On down days, write puts to get it at a lower price. In the new year, you'll probably get a better chance to buy. At that time, money will probably flow from the high flyers into the more beaten-up names like the telcos, so the pricier names will come down a bit.

Became really focused on fundamentals. As a cashflow investor, that's what you like to see. Cashflows and margins have been improving. Valuation is the sticking point. Well run, but too rich for cashflows it's generating. He watches it and its free cashflow yield.

E-commerce remains strong, so the stock has had a good recent few months. But the valuation is too high. Take profits, if you own.

It has almost doubled since the summer and this doesn't justify the improvement in guidance. It is trading at over 100X next year's earnings with 22% revenue growth for the next year. A number of stocks have run ahead of their fundamentals including Shopify. It is time to take some money off the table.

From late 2022, you can see the breakout of the positive band. Technically, you can't deny that it's a good setup. From a seasonal perspective, tends to perform well this time of year. Can also do well into April.

Not buying in this range. Likes the story for the longer term. Reminds him so much of AMZN 5-7 years ago, with sales still growing and profitability starting to increase. Now a lot of the earnings are flowing to the bottom line. 

Last quarter shows that earnings growth is accelerating. Valuation at 10x revenue not as excessive as it's been. Strong  momentum. Still a dominant player in an area of the industry where there's still not a lot of competition.

Rising in the RSI rankings, which means its price has been improving and it's winning the head-to-head battles against other senior Canadian stocks. Retailers in general have been doing well. Broken out, acting extremely well.

Strong company with good outlook. Stock has a lot of upside. Trading at premium so would recommend holding for the long term. Founder led with a large amount of skin in the game. 

It's been volatile, especially off the August lows, and is trying to recover. Their last earnings beat. She sees 5.5% upside and scores only 1/10 in value and 5/10 for fundamentals. 

E-commerce in a box, turnkey solutions. Getting better and better. Tremendous competitive moat. Monster grower of revenue and gross merchandise value, consistently at a high rate. Big moves can accompany earnings releases, so he'd wait to add. Hold for the long haul.

Tremendously creative people who keep finding ways to create value for merchants. Spends lots on R&D to do this.

SHOP reports November 12th pre-market. Estimates call for Revenue of C$2.94B and EPS of 38c. We think the stock has good potential to beat these estimates somewhat given pricing changes and resilience with consumer and e-commerce demand. There are some mixed views on the latter two factors however, so we are cautiously optimistic given some of the volatility that SHOP saw earlier on in the year. Risks are a slow down in consumer and economic conditions as well as any margin pressures. SHOP has previously been punished for declines in guidance on margins, so improving profitability is something that the market is demanding. Catalysts for growth are increasing the number of merchants on SHOP's platform, having more merchants upgrade their subscription tier, and increasing GMV. We also think that the growth in the offline B2B transaction side of the business could be a catalyst to drive the stock higher. 
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He owns it in the aggressive platform. They also have a more conservative equity platform. He bought it on the trend line. It is coming into its old high which is a point of resistance. It is OK but don't buy today.

SHOP is trading at 11.1x Forward Price/Sales. It is not cheap, but the valuation has come down to a more reasonable range for a high-quality name. The company is at the tipping point of being profitable. Stock-based compensation has been under control recently along with a healthy growth rate in its operating cash flows. SHOP seems to be on track to become a compounder again. Based on consensus estimates, it is expected to grow its revenue by more than 20% over the next few years. We think it is at a good price to add some here, but not too aggressively. We would be nimble to add to SHOP over time when opportunities present themselves. 
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He bought it during the August tech sell-off. They like their growth profile. Cash flow is breaking even. Expensive on sales and earnings bases, but less so now. Small vendors still need their services. Offers long-term growth with potential. 

Great run. If you believe that e-commerce retail has a lot of legs (which he does), there are other ways to express that view. SHOP is stuck in the middle. Doubled off bottom, but faces structural issues of having to go up-market to enterprise customers, and AMZN is already there.

Moving up from micro-merchant is easier said than done. Being the UI layer and the feature layer is the most vulnerable part of the value chain that is global e-commerce. Tactically, he'd own AMZN.