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Shopify (NYSE:SHOP) Stock: Hedge Fund Trading in a Slump
Stock Analysis & Ideas

Shopify (NYSE:SHOP) Stock: Hedge Fund Trading in a Slump

Story Highlights

Shopify stock has lost substantial value in the recent past. Despite the dip, SHOP stock has a negative signal from hedge fund managers.

Shopify (NYSE:SHOP)(TSE:SHOP) offers a platform for internet commerce. A slowdown in e-commerce growth, tough year-over-year comparisons, and the broad tech sell-off amid fears of a recession led to a significant decline in Shopify stock. Though Shopify stock has declined quite a lot (down 77% year-to-date), TipRanks’ Hedge Fund Trading Activity tool shows that hedge funds remain negative about its prospects.

SHOP Stock: Hedge Fund Activity  

Per the tool, hedge funds decreased their holdings in SHOP stock by selling 20.7M shares in the last quarter. Also, SHOP stock was among the top five stocks that hedge funds sold the most

Eight hedge fund managers, including Ray Dalio of Bridgewater Associates and William Duhamel of Route One Investment Company, closed their positions in SHOP stock. Further, eight more fund managers lowered their holdings in SHOP stock last quarter.

However, three hedge fund managers capitalized on the correction in SHOP stock and opened new positions. Meanwhile, an equal number of hedge funds added more SHOP stock to their holdings. 

Overall, the tool shows that the hedge fund confidence signal is Very Negative on SHOP stock

What is the Prediction for Shopify Stock? 

Shopify stock forecast on TipRanks shows that analysts are cautiously optimistic about SHOP’s prospects. It has received 12 Buy and 14 Hold recommendations for a Moderate Buy rating consensus. Further, the average price target of $43.02 implies 37.6% upside potential.

Though SHOP stock forecast shows a decent upside over the next 12 months, it has a negative signal from hedge funds and insiders (corporate insiders sold SHOP stock worth $3M in the last three months). Overall, the stock sports an Underperform Smart Score of 2 out of 10 on TipRanks. 

Concluding Remarks 

The slowdown in e-commerce demand and the ongoing uncertainty could continue to pose challenges for SHOP stock. Further, hedge funds and corporate insiders selling SHOP stock sends a negative signal. However, a reacceleration in e-commerce demand, easing of macro headwinds, and Shopify’s investments in growth measures could boost its stock price. 

Disclosure 

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