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- Buy Shopify... But Not Yet! ⏱️
Buy Shopify... But Not Yet! ⏱️
PLUS: I Got Shook Out 😭
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For the 22nd January 2025:
Buy Shopify... But Not Yet! ⏱️
News Without Opinions 📰
I Got Shook Out 😭
Invest Like Warren Buffett 🧠
Buy Shopify... But Not Yet! ⏱️
If history repeats itself, there’s a buying opportunity on the horizon.
There’s been rumours that Shopify are going to smash their Q4 earnings. But that’s exactly why I’m not buying right now.
Stick with me.
The Good Stuff 🌞
Analysts have been sifting through a bunch of data to get ahead of the game & it looks like Q4 earnings is coming in hot.
E-commerce in easy mode for Q4: Shopify’s Q4 gross merchandise volume (GMV) is looking strong. Any guesses why? No prizes if you had “Christmas spending”.
Margins looking tasty: Merchant growth slowed a little but tehy’re making up the difference with hefty margins.
Analysts are loving it: Analysts have revised Shopify’s Q4 EPS upward 27 times out of the last 29 revisions.
Are you even more confused now on why I’m waiting to buy in?
Expectations for next earnings. 27 upwards revisions compared to 2 downwards for EPS
Well first of all, Shopify has missed EPS expectations in 5 of the last 6 quarters so that’s a thing… But wait, there’s more…
The Q1 Curse 👻
Q1 has been cursed for Shopify.
Over the last 3 years, their Q1 guidance has been…. not great. It makes sense. Everyone puts their wallets away after all that holiday spending. But this is how we can profit.
Shares have dropped an average of 17% after their Q4 report drops.
Does it mean it has to drop 17% again? Absolutely not.
Is it a scenario worth being prepared for based on the very consistent pattern of Q4 earnings followed by weak Q1 guidance followed by a huge drop on open?
I think so. I’m keeping some cash aside for it.
What It Means for You
If history repeats itself, it’s a perfect entry point.
Shopify has been pretty flat for the last 6 weeks. Feels like we’re waiting for some volatility
Shopify’s been trading flat for the last six weeks so it feels like the markets waiting for it.
Even at the current price, analysts feel there’s about a 13% upside. I lean more to “fairly valued”.
News Without Opinions 📰
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I Got Shook Out 😭
You’ll never do a trade & say “That was perfect!”
It’ll always be “I should’ve added more” or “I should’ve used less capital”. “I should’ve held longer”. “I should’ve sold sooner”
You get the idea. I’m not immune to this.
I went heavy on Nasdaq futures with a plan in mind. It would’ve netted me $4,000.
Instead, the markets got a little shaky, Trump’s inauguration was coming up, treasury yields were rising so I abandoned ship. I closed the positions with $1,000ish profit.
A little annoyed I didn’t stick to the plan but closed positions still look healthy
The market really got behind the Stargate Project idea today & sent the Nasdaq flying. I would’ve made my $4,000. So why am I telling you this?
Because the Nasdaq is running hot & it’s still off of highs. And treasury yields are still rising.
I think that means we’ll see a pull back on the back half of this week. The markets running on news of a project. A pretty big & impressive project promising half a trillion in private investment.
But as it stands, that’s all it is right now. A promise. And I think the hype will die down & give me a chance to re-enter. Apple has also been looking shaky & they make up a big chunk of the Nasdaq.
I expect we’ll see futures pull back to moving averages before we get a new high
If they catch some proper downside momentum they might drag everyone down with them.
I’m looking at $21,600ish for entries on Nasdaq futures on 20x leverage which’d net 50% profit on a return to old highs.
If you want less risky options so you can sleep at night, opt for the TQQQ or if you really can’t handle any drawdown, QQQ.
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