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written by reader Another MF EMAIL today

By margotr, May 23, 2022

what stock is this? “You see, we originally recommended this stock in February 2017, and those members who bought on that day and held have seen their position skyrocket by over 1,000%!But we here at The Motley Fool are convinced we’re still in the very early days of this company’s trajectory.” Searching i just found PAYC https://www.fool.com/investing/2017/02/05/heres-my-top-stock-to-buy-in-february.aspx

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Travis Johnson, Stock Gumshoe
May 24, 2022 2:59 pm

Haven’t seen that ad, which service was it pitching from the Fool? If Rule Breakers, that could be Shopify, I think that’s right around when they started to pitch that one.

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Travis Johnson, Stock Gumshoe
May 24, 2022 3:57 pm
Reply to  margotr

This is the last note I posted on that one, about two weeks ago:

As we feared, following the weak Amazon (AMZN) results and their commentary about falling e-commerce demand, Shopify (SHOP) “missed” its numbers and offered up very low guidance in their earnings report, and the stock got clobbered. This is one of those great companies which I do not see myself selling, though that’s easy to say after taking some profits years ago to reduce my cost basis, but the days of SHOP getting a valuation of 50X sales seem to have been permanently excised from our brains now, and there doesn’t seem to be any likelihood that they will bounce back quickly. They’re going to have to slog it out.

With a huge number of potential beaten-down growth stocks to nibble on, I’m not in a huge rush to buy more SHOP, particularly as we wait to see whether Amazon’s new initiatives take a bite out of their business, but it’s certainly relatively appealing here. Unlike many of the cloud and e-commerce darlings, Shopify has proven out their model, built a huge and sticky user base, and achieved enough scale to be profitable as they now touch almost as many e-commerce transactions in the United States as Amazon does — they’re not resting on their laurels or maximizing profitability, they remain focused on investing in growing their platform (including with the acquisition of Deliverr this week to improve their logistics offerings), but we know it can work, and I remain convinced that Shopify is a great company, with exceptional leadership.

That’s reason enough for me to be patient, largely because I have a lot of admiration for Tobi Lutke and the giant he has built, with its singular focus on improving life for small business owners and creating an easy on-ramp for people to become online retailers, but they are clearly not in an “all things are rosy” position right now, despite what they say about their confidence about revenue growth picking up again in the second half of the year. If you’ve been watching Shopify and were angry about missing the boat in recent years, we’re getting to the point where it’s pretty appealing to start nibbling… but it may be a while before the story turns, especially if they fail to hit their pretty tepid (by their standards) forecast of 20% growth in this next quarter.

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