The company’s growth also slowed down while still generating negative free cash flow and profitability. In addition, valuation for Fintech companies declined meaningfully, making the share price today still much lower than its IPO price in 2019. The company has been acquisitive in the past, but we think the track record of M&A is quite poor, given a meaningful goodwill write-off LSPD recently reported in the most recent quarter. It has a strong balance sheet with almost a quarter of the company’s market capitalization in cash. We see potential for LSPD to be acquired by other large Fintech companies. That being said, that catalyst alone can’t be a worthwhile investment thesis for LSPD. To be conservative, we are downgrading our rating by one notch to a ‘C+‘.

The company has room for improvement in terms of volume, as the company experienced two consecutive years of slight negative growth. The company possesses a healthy track record of growing dividends consistently over the last ten years, with occasional large special dividends. WPK’s management also accelerated the company’s share repurchase activity most in recent years, which indicates management believes share prices are trading at attractive levels. WPK has maintained a very strong balance sheet with essentially no debt and funds for capital expenditures through internally generated cash flows. Tariffs could be a near-term headwind for WPK’s business, and the uncertainty is still quite high regarding the magnitude of how it may affect WPK’s volume. We think WPK is a stable company which currently trades at an attractive valuation compared to historical averages, but its growth trajectory may not be quite too appealing. We are maintaining our rating of a ‘B.’

Given the strong competitive advantage of high switching costs and a tremendous addressable market. SHOP is expected to continue to grow at a healthy pace in the foreseeable future. The company has shifted its long-term growth strategy relative to giants like Amazon by only focusing on high-value-added, high-margin software solutions and divesting capital-intensive, competitive, commoditized logistics. Lastly, SHOP’s management has demonstrated a commitment to cost control recently, which we think could help expand margins significantly over time due to its business model with high operational leverage. The company continues to be a great long-term holding for growth-oriented investors. We are maintaining our rating of ‘A-‘.