What happened

Shares of e-commerce giant Shopify (SHOP -0.41%) stock fell yet again in June, another 17%, according to data provided by S&P Global Market Intelligence. The website provider is dealing with cutbacks in retail spending as well as the overall uncertain economic outlook. The stock price enjoyed a small uptick before it split on June 29 and began to creep back down again. 

So what

Shopify makes shopping solutions, and if people aren't shopping, that's bad news for the company. As inflation persists and gets worse, consumers begin to pull back on spending, especially discretionary spending.

That's already showing up in Shopify's slowing sales. Revenue increased 22% in the 2022 first quarter, after a 110% jump last year, a company record. It's not surprising that accelerated growth is coming to an end, both because of stimulus payments and stay-at-home orders last year, combined with near-term pressure this year. 

Despite the macro environment, Shopify's model remains strong. In the first quarter, monthly recurring revenue increased 17%, and many new merchants joined the platform. However, it's been plowing money back into growing the business, which is taking a toll on the bottom line. Net income of $1.3 billion last year turned into a $1.5 billion loss this year.

These investments should pay off down the line. The company has been able to amply demonstrate profitability, and expanding its services along with recruiting new clients should result in higher sales and profits.  

Now what

Shopify stock split at the end of June in a 10-for-1 split. There wasn't the strong upward movement that typically accompanies an impending stock split, although the price inched up slightly. The future here looks too uncertain, and the market isn't optimistic enough to have given it the uptick it might have deserved. 

The stock split was curious to begin with, since the shares' $300 price tag isn't as much of a barrier to entry as a four-digit one, such as Amazon's before it split at the beginning of June. And a 10-to-1 split is also intense, sending the price down to around $30 per share. That's also why it might not have been greeted as enthusiastically as Amazon's.

Accounting for the stock split, Shopify stock is down 75% this year. Near-term pressure will remain as inflation keeps up and interest rates keep rising. But Shopify is a top stock with plenty of long-term potential, and investors might want to consider the low price a buying opportunity.