Two Steps Forward, One Step Back As Shopify Posts Good Results Offset by Light Outlook; FVE Stable

Narrow-moat Shopify reported fourth-quarter results that were ahead of our expectations from a revenue and operating margin perspective. On the positive side, the company provided guidance for the first quarter, the first time in some time it has done so. However, the outlook is light relative to our expectations. We continue to believe that the Shopify Fulfillment Network is likely to gain significant traction with customers and along with continued penetration of other merchant solutions, should help drive strong growth over the next decade. Given results and guidance, we are maintaining our fair value estimate of $45 per share, (CAD 60, from CAD 61 previously solely due to currency moves). A rebound in software stocks coupled with rumors about activist shareholders stepping in have left the shares fairly valued in our view.