Shopify's Down 80%: Should You Buy the Dip on this E-Commerce Stock?
E-commerce company Shopify (NYSE: SHOP) was a big winner during COVID-19, but the stock has fallen from grace, down a whopping 80% from its peak. Wall Street can be irrational in the short term, but it's fair to ask questions in the face of such a significant decline.
Investors may uncover more questions than answers as they dig into Shopify. Here is what's going on and why investors shouldn't assume that Shopify is cheap just because the stock's fallen so far.
Shopify remains a winning investment; shares are up more than 1,200% since the company's 2015 IPO. However, the stock was once up 6,000% and has declined tremendously over the past 18 months. The stock seems like a bargain on the surface; if you go by the price-to-sales ratio (P/S) of 8, that is arguably its cheapest valuation ever. But it's not always that straightforward; for example, let's compare Shopify's valuation to the undisputed king of U.S. e-commerce, Amazon:
Source Fool.com
