Caprock Group LLC has acquired a new stake in Shopify Inc. (NASDAQ: SHOP, TSE: SHOP), investing approximately $2.71 million in the third quarter of 2023. This purchase involved 19,165 shares of the e-commerce platform, as disclosed in the firm’s recent Form 13F filing with the U.S. Securities and Exchange Commission.
Numerous institutional investors have recently adjusted their positions in Shopify, indicating a growing interest in the company. Brighton Jones LLC increased its holdings by 2.8% in the fourth quarter, now owning 21,176 shares valued at about $2.25 million after acquiring an additional 584 shares. AQR Capital Management LLC saw a significant increase, raising its stake by 107.3% in the first quarter, resulting in ownership of 14,576 shares worth approximately $1.39 million following the purchase of 7,544 shares.
Other firms have also made noteworthy adjustments. Sivia Capital Partners LLC increased its stake in Shopify by 6.6% during the second quarter, now holding 8,190 shares valued at $945,000. CWM LLC raised its position by 22.8%, bringing its total to 15,840 shares worth around $1.83 million. Yousif Capital Management LLC also lifted its stake by 8.7%, now owning 15,114 shares valued at $1.74 million. Collectively, institutional investors now control 69.27% of Shopify’s stock.
Analyst Ratings and Market Insights
A number of analysts have provided updated ratings for Shopify, reflecting mixed sentiment about its future. Scotiabank recently upgraded the stock from a “sector perform” rating to “outperform,” raising the target price from $165 to $200 in a research note dated January 8, 2024. Similarly, the Canadian Imperial Bank of Commerce reaffirmed an “outperform” rating, while Needham & Company LLC reiterated a “buy” rating with a price objective of $180.
KeyCorp and BMO Capital Markets have set target prices of $160, indicating a consensus rating of “Moderate Buy” among analysts. Currently, 31 analysts have rated the stock as a Buy, while 14 have given it a Hold rating, according to MarketBeat.
Investors are closely monitoring several factors influencing Shopify’s performance. The company recently reported a 31% increase in revenue for the fourth quarter, exceeding expectations, and also announced a $2 billion stock buyback, enhancing its cash generation capabilities.
Challenges and Market Reactions
Despite the positive revenue growth, Shopify faced challenges, including an earnings per share (EPS) miss for the fourth quarter, reported at approximately $0.46–$0.48 compared to the consensus estimate of $0.50. This earnings miss has led to a post-earnings selloff as investors reacted to margin pressures.
Analysts from various firms have expressed concerns, with some adjusting their price targets downward. UBS lowered its target to $145, maintaining a neutral rating, while Wedbush and Citizens reduced theirs to around $160. These adjustments signal uncertainty regarding Shopify’s valuation and potential near-term catalysts.
In addition, analysts highlighted risks related to the execution of the buyback plan and short-term volatility. The pressure on margins, particularly from the growth of Merchant Solutions, may continue to impact stock performance until there is greater clarity on these issues.
As of the latest trading session, shares of Shopify opened at $110.66. The company has a market capitalization of $144.06 billion, a P/E ratio of 118.99, and a beta of 2.83. Over the past year, Shopify’s stock has fluctuated between a low of $69.84 and a high of $182.19.
Shopify is a Canadian commerce technology company that offers a cloud-based platform for businesses to create and manage online and physical retail stores. Its comprehensive software-as-a-service e-commerce platform enables merchants to build customizable storefronts, manage product catalogs, process orders, and handle inventory, while also supporting integrated point-of-sale systems for seamless omnichannel selling.
