Shopify stock downgraded on valuation concerns

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Loop Capital analyst Anthony Chukumba downgraded Shopify’s stock to hold from buy Monday, writing that his rating change is “based on Shopify’s valuation, as opposed to a more bearish view of the company’s fundamentals.” He still sees Shopify as “well positioned for the secular shift to e-commerce” and is “impressed by the company’s laser focus on eliminating merchant pain points and continuous innovation.” At the same time, he argues that Shopify’s current valuation is “in line with our bullish outlook” given that shares are trading at 34.1 times his 2022 revenue estimates. “We would await a more attractive entry point before becoming more constructive on the stock again-and given the high volatility in the stock price…we may not have to wait very long,” Chukumba wrote, while keeping a $1,600 price target on the stock. Shopify shares are up 47% so far this year as the S&P 500 SPX, -0.01% has risen 25%.

This article was originally published by Marketwatch.com. Read the original article here.

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