This market is absolutely brutal for technology stocks. Whether it’s Shopify (TSX:SHOP) or nearly any company traded on the NASDAQ, macro forces have taken valuations lower and reduced risk appetite. For those who’ve been invested in SHOP stock since the beginning of the year, this has certainly been among the most brutal selloffs seen since this e-commerce company went public.
On a year-to-date basis alone, SHOP stock has lost more than 70% of its value. This former growth juggernaut has seen its top-line growth rate slow and losses creep into its earnings reports once again. For long-term investors looking for companies generating positive earnings, SHOP stock appears to be on the out, with more “boring” names in.
That said, I think now is the time to start getting excited about Shopify. Here’s why SHOP stock could be a compelling opportunity right now.
Shopify shifts its focus to offline retail
During the pandemic era, Shopify experienced huge growth as merchants were forced to shift toward online platforms to sell their goods and services. Now, as the world returns to normal, buyers are shifting their focus back to physical stores. Interestingly, Shopify is targeting offline retail with the help of POS Go.
According to recent reports, Shopify is becoming a key player in the international omnichannel market thanks to POS Go. For retailers who cater to both online and offline sales channels, this payment device can come in handy.
POS Go is a mobile gadget that comes with a barcode scanner. It enables retailers to check out virtually from anywhere. Moreover, this device enables businesses to raise their in-store experience by letting them view customer notes, purchase history, detailed product information, etc.
According to Quartz, top international retailers like Alo Yoga, James Perse, etc., have adopted POS Go to power both their online and offline businesses.
This new innovation by Shopify has resulted in a 60% growth in its offline payment services in the past year.
Mr. Arpan Podduturi, Shopify’s vice president of Product, said in a statement that offline sale is back, and retail is rapidly evolving. Thus, Shopify is heavily investing in hardware solutions that will assist innovative and fast-growing investors around the world.
Other catalysts that could take SHOP stock higher
To facilitate future growth and enhance customer experience, Shopify continues to develop new innovations and provide new services. For example, it is working on Connect to Consumer (C2C), a new radical commercial model. Furthermore, to help retailers embrace this new model, Shopify has launched new features like e-commerce on Twitter, Tap to Pay on iPhone, and Tokengated Commerce, and it is teaming up with Google to help customers shop locally, and more.
Thus, apart from expanding offline, this company’s strategy to expand its online platform is very strong. Over time, these innovations could bring the growth story back to Shopify.
Bottom line
Shopify might not be in a good position right now. The stock is falling. That said, as SHOP stock becomes cheaper, the potential upside with this company over the long-term increases.
Accordingly, for investors with a long enough time horizon, I think now is the time to start getting excited about Shopify. For those who liked this stock above $100, at under $40, it’s a steal.
