What happened
On Wednesday, it was a case of dueling analysts on the prospects for Shopify (SHOP 2.63%) and, judging by the investor reaction, the bearish take out of the two won. As a result, the e-commerce services provider's shares dipped by 1.3% on the day, coming very close to matching the 1.7% decline of the S&P 500 index.
So what
Since we here at The Motley Fool tend to be optimists, let's look at the Shopify bull first. This is RBC Capital's Paul Treiber, who on Tuesday reiterated his sunny outlook on the company, specifically his outperform (read: buy) recommendation at a $60 price target.
In his latest research note, Treiber characterized Shopify as having "one of the most compelling growth stories in our coverage." He pointed out that services such as Shopify Plus, Pay, and POS continue to grow, to the benefit of the company's fundamentals.
His peer at Morgan Stanley, Keith Weiss, would surely beg to differ. In his Tuesday update, Weiss knocked his Shopify price target down to $40 per share; it was previously $44. He is still notably cool on the stock, as he maintained his equalweight (neutral) recommendation.
The prognosticator zeroed in on the company's fulfillment efforts, writing that "our analysis finds that building out Fulfillment is likely just the beginning of a multi-billion dollar investment cycle with a difficult path to significant operating profitability."
In his eyes, instead of being accretive to Shopify's business, it highlights the growing competitive threat from rival Amazon.
NASDAQ: SHOP
Key Data Points
Now what
These days, with concerns about the global economy front of mind for many investors, it's easy to take a more negative take on a tech stock to heart. Investors continue to sell out of the sector, worried that a slowing business environment will ding the fundamentals of its companies. That concern is certainly valid; however, Shopify remains a major player in the durably hot and growing e-commerce field, so it's likely better days are ahead for the stock.
