Shopify基本面强劲（增长32%，利润率扩张），但高估值和未解决的AI问题导致当前持中性/负面立场（“太难”堆，“D”评级）。

I'm actually working on an updated podcast on Shopify. So, that'll be be coming out in about uh a month or two.

All right. Now, an hour and 40 minutes down and two companies to go. Um, how about we do we do Shopify first? It's a company that was covered a while ago on the podcast.

>> Yeah. Yeah. Yeah. Um, yeah. Can you pull up the uh margin inflection chart? >> Absolutely. >> For Shopify. Yeah. So, um yeah, Shopify is uh is is is interesting. Um I have such a mixed feelings on it.

Shopify is uh is is is interesting. Um I have such a mixed feelings on it. The valuation um is is not cheap. Really has never been cheap. Um they're also growing at an incredible rate. So, you know, what does it mean to to be cheap, right? Yeah. Look at the um uh revenue compounding at 32% a a year. uh and and and more that that's just going back to June 24. If you go back further, it's it's it's even much more. So, this is an incredible grower. Uh and and the PE has I mean, look at that. 90 95 times earnings. And right, you know, PE for a company like Shopify is is not the right way to value it, right? You can't look at 95 times earnings and say, "Oh, well, you know, the company's too expensive." um that's just not you know the addressable market that Shopify is growing into is so big uh that that you know it's really hard to to determine what a fair price for the company is

Um for Shopify, you've seen uh margins go from negative 20% to positive uh almost 14%. Um which is a hell of a swing too. Uh and in that time, stockbased comp as a percentage of revenue has come from, you know, 10% back in 2022, which is incredibly substantial. Um down to about 3% 3 and a.5% which is uh is still substantial. So there there's been a lot of dilution in Shopify. I think going forward the business is at a scale uh and potentially able to do more buybacks and stuff um where dilution becomes less of a concern and then we're seeing their operating leverage really kick into gear

Whereas uh Shopify is empowering small businesses to run their own websites and and and uh get their own uh you know do their own payment processing and have their own logistics you know through Shopify and all these different things. And so Shopify really has positioned itself as the uh champion of of small business commerce online um and an alternative to the very tempting Amazon ecosystem. Uh you know, tempting to uh these brands to to enter into it. Um a little bit like selling your soul to Amazon.

um yeah, you know, with Shopify, I uh I was inspired to to look more into it and I'm I'm still in the early stages of of kind of re-resarching Shopify and getting up to speed on it. We put it in the two hard pile last year.

uh what what got me excited about it is uh one of our our favorite uh this is you know not a sponsored plug um but one of our favorite publications to follow is stratey from uh Ben Thompson uh who's just an incredible tech analyst who's been following the industry for for decades. Um and so he had an interview with a gentleman named Michael Mortyn um talking about how actually uh the you know a year or two ago uh the the narrative really flipped on Shopify uh where they thought that okay you know we're going to have uh direct checkout through chat GBT right that was a with like for Amazon so you're going to open chat GBT and you're going to do all your shopping on Amazon and you're going to directly you know an agent's going to do it for you you're going to make these direct p purchases Um and and actually OpenAI rolled back that feature. Um you can't do uh the direct what do they I don't remember exactly what they called it. Um direct shopping, direct purchase. Uh they rolled that out uh or they they rolled it back in. So they they undid that with the point being um there was a real thought that everything was going to go through the LLMs uh shopping going forward online and maybe agents um and then that would be a boon to the biggest um centralized marketplaces. So like places like Amazon and Walmart of just chat GBT would drive all the hey I'm looking for shoes you know help me find some sneakers to buy and that's your chat GBT query and then you know you end up on Amazon or Walmart. Um but actually what Michael Morton was saying is uh you know this is proprietary research so I I that he shared so I can't confirm it but um it was an interesting podcast and he he basically said what we've what he has seen is that web traffic to individual websites um post AI overviews and the roll out of agents and these different things and you know the release of claude and like um there's been an increase in web traffic to small businesses. Uh, and so that's what I want to try to better understand. Um, if AI, uh, you know, it ends up being like a massive boon for, you know, it's either going to dramatically empower the small uh, the small commerce business or it's going to like feed into reinforcing the advantages of the biggest players. and we don't really know which direction it's going to go in yet. Um, and I thought I would have thought it would would go into the direction of reinforcing like the incumbents, but anyways, Michael Warren shared some really interesting data suggesting that um, actually the opposite might be true. So, that's why I'm digging into Shopify again, but I I I'm totally It's like too hard pile. Um, I think I can get really excited about it, but um, I'm not I'm not there yet. Uh, and and my my answer could change dramatically. Like today, I would probably put it as a D. Like, I'm really nowhere near ready to to advocate for putting it in the portfolio. Um, but once I finish, you know, kind of doing some follow-up research, uh, I wouldn't be surprised if I become significantly more bullish, if I if I, uh, you know, see some more, uh, data on the trends, um, and in online commerce and and how, you know, Open AI and and anthropic are kind of affecting that and whether it's benefiting these these smaller uh, e-commerce operators.

So um to me Shopify is the biggest question mark in of all these companies where um I think I mean it is a really good business and just in terms of whether the current valuation is justified um and you're getting a good price. I think that could be true but uh I'm certainly not sold on it.

Um because otherwise I think quality wise it's it's a fantastic business. I don't know exactly what Shopify does for the logistics, for example. U, but I think it's just way more I think how I thought about Wix is just like you want to build a website and that's it. And Shopify is literally you want to build a shop, right? you want to ship things, you want to ship that at volume. Um, you have all the problems that come up if you have a shop and you not only need to ship, but you have um returns, you have payments, all of that stuff on a much larger scale. That for me is Shopify.

Um, I don't have an opinion necessarily on how AI will change things. I do know that about a year ago, I felt like AI would disrupt especially payments um and and shopping generally more than it actually did. was one of those things where aentic shopping I don't hear about that a lot anymore. That used to be a huge thing a year ago and everybody thought that you made maybe over chat or whatever um you have your agent and then it goes shopping for you. Um that might still be the case in a couple of years. Um and then you have to think about will they go to Amazon more often than to those smaller shops that are hosted on on Shopify. Um but by now it it sort of seems like it will take longer than expected. Um, and I don't see any trends where I would say that probably hurts Shopify or smaller smaller stores.

looking at the other companies here, looking at Meta on at B, I would probably put it here. Um, it's just a way more risky bet than than most other stocks here. I could also see how it's lower. Um, if Shopify is D, you could probably you could probably put it lower.

And for me it's it's sort of the two hard pile. Like I said, Shopify I'm still working on.