February 2022 Shopify (SHOP) Stock Pick and Dr. Stoner's Whiskey Pairing

Authors: Mark Peters, Allan Maule, and Byron "Train" Harrell

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Website: www.shopify.com

CEO: Tobias "Tobi" Lütke

Founder: Tobias Lütke

Market Cap at Time of Article:$102.46B

Current Analyst Recommendations:

On a scale where 1 is a "strong-buy" and 5 is a "sell," the analyst consensus on Shopify is currently at a 2.3. This makes SHOP a "buy" even among huge amounts of FUD (fear, uncertainty, doubt) in the market today. After the big pricing corrections we’ve seen in January 2022, the average analyst still gives SHOP a price target of $2,199.67. With a current price of $872.23, SHOP is more of a "strong-buy" for the DubyaDubya team, who view this current price as an amazing bargain for a company with a huge future.

Quarterly Revenue Growth Year-Over-Year: 46.4%. This is extremely solid year-over-year quarterly growth, especially for a large company!

Insiders: We like our companies to have significant insider holdings, and this is an area of weakness for SHOP. Insiders hold only 0.29% of shares. Morgan Stanley owns the largest amount of shares at 5.3%.

What makes Shopify (SHOP) worth your hard-earned money for the next decade or more?
e-Commerce was growing rapidly even before the pandemic. Then Covid confined most of us to our homes. When we couldn’t go out to dinner or to our favorite whiskey bar, we went online to buy things. This made 2020 an epic year for eCommerce, and things haven’t significantly slowed even after economies began to reopen; in 2022, online retail sales are predicted to reach $1.06 trillion in the U.S. alone.

While all eCommerce providers allow merchants to sell goods online, Shopify stands out by empowering merchants to create a unique digital storefront to market, sell, and ship products online. Moreover, Shopify’s business model is especially focused on small businesses rather than only established retail giants. Every small business needs a good beginning—to hit the ground running with an easy-to-use platform that streamlines their path to grow, advertise, and manage its products for sale—and Shopify provides that.

Companies love Shopify because it automates all kinds of routine tasks ranging from payments to inventory management. Shopify also helps businesses connect with the largest marketplaces in the world to sell their products. If you think Amazon, Facebook, and Instagram are going to be mainstays, then SHOP needs to be a part of your portfolio.

Why talk about Shopify (SHOP) to all your friends and family?

Shopify loves the little stores with a dream. Merchants continue to come to Shopify in large numbers because the company has an extremely small take rate, which is the percentage that Shopify charges its merchants for every sale. Shopify’s take rate of 2.6% is minuscule compared to larger e-commerce giants like Amazon and eBay.

In simple terms, Shopify provides retailers tremendous support without charging exorbitant fees to do so. In simpler terms, Shopify pays for itself. Some people see Amazon as a competitor, but Amazon offers only a big marketplace while Shopify offers a true platform to help merchants operate. eBay is another competitor, but it is more suited for merchants that are already established to expand their business. If you are looking to establish an online brand, then Shopify is the best place to start.

How is this company disruptive?

Shopify continues to look for ways to help companies of all sizes compete. One of their biggest drives is their goal to democratize commerce by empowering smaller retailers to sell to everyone. By speeding up delivery times and lowering shipping costs, Shopify provides a clear alternative to Amazon in the warehousing and shipping sector. If you want to invest in the freight train that is eCommerce without only buying stock in huge companies, then Shopify is a great pick.

Conclusion:

Shopify was born when the CEO started an online snowboard business. The pain of trying to sell online with cookie-cutter platforms built for big businesses is what led Lütke to develop his own software. He soon realized this customizable software was far more valuable than his snowboard business.

Lütke is constantly challenging himself and his company to look for ways to be more efficient. That drive, accompanied by a culture obsessed with pleasing its customers, has propelled SHOP’s rapid rise and positioned them as a major player for years to come. With an analyst valuation of more than $2,000 and a current price under $1,000, it's time to buy this cash cow at a big discount.

Whiskey Pairing: Dr. Stoner’s Smoky Herb
Retail: $40 Proof: 84

The Reflection - High Times in Low Times

Like every normal person, I try to surround myself with exceptional people. When I’m alone, I often picture one of these exceptional people responding to my innermost thoughts. So I got deep with myself and asked everybody in my head an important question – If you wrote an autobiography, would I be in it? My brain exploded and when I came to, I wandered into a location that sells whiskey and had a conversation with myself:

(Train spots Dr. Stoner’s “Smoky Herb” whiskey with an ALC/VOL of 42.0%)

Train – Did you smoke something?

Train – I don’t think so…

Train – You don’t “THINK”????... Never mind, do you like “smoky” in your whisky? Isn’t that a scotch, Laphroaig, kissing a mermaid at a BBQ, kind of thing?

Train – Did you see the ALC/VOL?

Train – Clever. But you answered the question with a question. That seems like some intellectual kung-fu that you are not in a place to slang.

Train – I don’t like “smoky”, but I’m a proponent of herbal remedies.

Train – I’m confused… are you trying to appeal to my homeopathic disposition to life’s natural therapies or Dave Chappelle’s “Half-Baked”?

Train – I’m not sure.

Train – It’s okay, I’m here to help. Shouldn’t we have a quick reflection before we purchase this stupid whiskey?

Train – Too late… I’m pretty sure that you’re aware.

Train – Let’s pause … Do the local NC ABC stores have a return policy? (It’s important to note that Train’s wife has an amazing ability to return unreturnable items to a store after purchase.)

Train – Stop being cheap and give it a try.

I grabbed this whiskey because I like to gamble. I rarely (optimistic) win, but I like to gamble. I’m not very good (I should be more optimistic), but I like to gamble. Recently, I went down to the French Quarter in New Orleans. There is a local casino on the water – Harrah’s. My wife calls it HAIR’oz, as if they are selling brushes and combs. I am often laughed at for referring to it as HAHR’oz, as if there is an entryway to a yellow brick road to the “ALLmighty”… Regardless, I’m pretty sure that I’m right.

As an educated, white, middle-class male with disposable income, I often set myself with a responsible limit of a $100 donation to the local casino. When I had first come to the establishment in my early years (maybe 5 years ago), I set my sights on the $5 and $10 tables, where I can, at least, get 2–3 free drinks in, tip generously, and get myself up to +$500 in wins before losing it all. I’ve had a lot of fun and “free drinks” with my donations over the years.

On my most recent trip to Harrah’s, I was appalled to find the all tables required a minimum of $25 per hand… for any table. It’s weird, but I actually spent less with the high prices. I would have preferred to throw in $100 for a bunch of time, get it up to $500, and lose it, as opposed to losing all of it before I get my first free drink.

The stock market seems to be doing a similar regularly scheduled decline. Then I find myself spending less at the poker table. Funny how that works.

Conclusion – Dr. Stoner Was a Gamble

Sometimes, when you gamble, you lose. And sometimes, you foretell that you will definitely lose on a gamble… and you do it anyway. I was confident that Dr. Stoner had a prescription more credible than Mike’s Hard Lemonade. But for the life of me, I could not identify with his smoky flavor in his special mix of herbs. I presume that the good doctor is frequently surrounded by smoky encounters and, perhaps, I can have another opportunity to enjoy the flavors when the situation presents itself.

In my scoring methodology, I probably will never rank something a 5 to respect the impossibility of absolute perfection. That said, I really do enjoy most booze and so I will rarely rank anything lower than a 3. This whiskey put me in quite a predicament. It wasn’t quite a whiskey as I think a whiskey or scotch is supposed to be. I want a whiskey that makes me want to smoke a cigar in a big leather chair talking with mob bosses about business. If I can’t have that, I want something that connects me to the earth. I see myself sitting on a big wooden stump around a campfire with old friends laughing about good times and sipping something sacred. With this in mind, I can’t rank Dr. Stoner as a classic whiskey. It has to be less than 3.

However, I will give this potent “whiskey” high marks for a delightful cherry-orange blossom scent. It connected me to my favorite 90’s rap songs about weed. It resembled more of a liquor. I would cheerfully sip it on the rocks with friends for some good jokes and give it the highest score for an almost-whiskey.

Score – 2.9/5