Shopify Stock: 1 Name That Unfairly Sold off on Black Friday 2021

Shopify (TSX:SHOP)(NYSE:SHOP) is one of many Canadian growth stocks that could recover quite quick after the Black Friday market plunge.

| More on:
Overhead shot of young adults using technology at a table

Image source: Getty Images

The stage looks set for a correction heading into December 2021, with the Omicron variant recently discovered in South Africa. Still, the odds of a bear market or 2020-style crash still seem incredibly unlikely, even if Omicron is the worst variant yet. Why? The world is better prepared to fight COVID this time around, with magnificent companies continuing to innovate to keep the insidious virus at bay.

Indeed, Moderna is hard at work on Omicron vaccines and various boosters, rapid test kits, and other innovations on the way.

Still, lockdowns can still happen. But with enhanced protocols and experience with the “new normal,” such lockdowns are less likely to have a devastating impact, and they may very well be shorter-lived, with all the protocols and innovations in place.

A brutal Black Friday for Canadian stocks

As such, I do think the Black Friday sell-off delivered most of the damage to this market. With the S&P 500 Composite Index down 3%, I think it’s a wise idea to start thinking about names to pick up on weakness. It’s tough to gauge when this latest dip will end, but I do believe many names were unfairly punished in Friday’s sell-off. Undoubtedly, e-commerce firm Shopify (TSX:SHOP)(NYSE:SHOP) had no business being down nearly 3.5% on Black Friday.

I think the plunges in firms like Shopify serve as incredible buying opportunities. While it may be too soon to load up on hard-hit cruise line stocks after this latest dip, I do think unfairly hit lockdown stocks like Shopify are worth at least nibbling on right here. Why? They followed in the footsteps of the broader markets. And it didn’t really make much sense, just like the many pandemic beneficiaries that plunged in the February-March 2020 stock market meltdown.

With supply chain issues, this Black Friday wasn’t great for everyday consumers in 2021. But for investors, it was an incredible sale that one should take advantage of, as like the actual Black Friday, such deals on stocks may only be available for a limited time!

Shopify stock: Unfairly hit on Black Friday 2021

Shopify plunged on Black Friday alongside the broader TSX Index, a rather confusing move given that Shopify powers e-commerce platforms for a wide range of small- and medium-sized businesses (SMBs). Indeed, it seemed as though Shopify would get some wind at its back once again. And with rates pulling back on the day, higher-growth names like Shopify probably shouldn’t have imploded by nearly 4% in a single day.

While SHOP shares are expensive, I do think they deserve to be that expensive. With the odds of an Omicron surge considered, Shopify seems like a relative bargain amid an uncertain market.

Over the coming weeks, I suspect Shopify stock could be in a spot to lead a recovery rally. Even if the markets continue dragging lower over renewed COVID fears, I don’t expect Shopify will continue to sag unless there’s a cash crunch. Such a crunch would be a huge opportunity for investors, though, as a bounceback is likely to be sharper than broader markets.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Shopify.

More on Investing

A close up image of Canadian $20 Dollar bills

3 Canadian Growth Stocks I’d Buy Under $20

These under-$20 growth stocks have the potential to deliver solid returns.

Read more »

A bull and bear face off.
Dividend Stocks

The 3 TSX Stocks to Buy Before a Long-Term Bull Market Begins to Build

The TSX may not go bullish for a while, even when the economy recovers from a recession, but investors should…

Read more »

stock market
Stocks for Beginners

A Bull Market Is Eventually Coming: 1 Stock to Buy Now and Hold Forever

Investors may be uncomfortable in market downturns, but try to stay the course and focus on the long term to…

Read more »

Woman has an idea
Tech Stocks

2 No-Brainer Stocks to Buy With $500 Right Now

Given their solid financials, healthy growth prospects, and attractive valuation, I am bullish on these two TSX stocks.

Read more »

Business success with growing, rising charts and businessman in background
Tech Stocks

A Bull Market Is Coming: 1 Growth Stock Down 33% to Buy and Hold Forever

Here's why quality growth stocks such as Aritzia are compelling long-term bets for TSX investors.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

TFSA Investors: Make $200 in Monthly Passive Income With This 1 TSX Dividend Stock

Here’s an attractive dividend stock TFSA investors can buy now to earn $200 in monthly passive income.

Read more »

You Should Know This
Bank Stocks

What the Collapse of U.S. Banks Means for Canada’s Big Six

The fear of the U.S. banking contagion spreading to Canada pulled down stocks of the Big Six banks. What should…

Read more »


Want to Retire Wealthy? 3 TSX Stocks to Add to Your Portfolio Now

Do you plan to retire rich? These three TSX stocks have potential to deliver stellar capital gains and make you…

Read more »