SHOP Stock Slammed After Withdrawing Guidance

The move sparked several price-target cuts

Deputy Editor
Apr 2, 2020 at 10:17 AM
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Shopify Inc (NYSE:SHOP) is joining the overwhelming number of businesses withdrawing their full-year forecast over uncertainties surrounding the coronavirus pandemic. The e-tail name said it still expects its first-quarter revenue and adjusted operating income --due out May 6 -- to be well above estimates, with more businesses becoming much more online amid lock-down measures. At last check, SHOP is down 8.9% at $350.60. 

The move has sparked price target cuts from at least three analysts, including BofA Global Research, which cut its price objective to $350 from $400. Coming into today, the consensus 12-month price target sat at $509.23, which is a a 32.4% premium to last night's close. Meanwhile, sentiment on SHOP is divided, with 12 analysts in coverage calling it a "buy" or better, 12 saying "hold," and one calling the e-commerce specialist a "sell." 

In the options pits, however, bears clearly rule the roost. In the last 10 days, 1.56 puts were picked up for every call at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than all but 1% of readings from the past year, suggesting that long puts have rarely been more popular.

Today's plummet puts SHOP right back near its pre-bear gap levels and back below its 20-day moving average for the second day straight. Despite this recent rocky behavior on the charts, and a now 12.3% year-to-date deficit, SHOP sports an impressive 70% year-over-year gain. 


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