Shopify’s stock plummeted as much as 19 per cent in intraday trading Wednesday as the company forecast slower growth in 2022 due in part to inflation concerns.
The e-commerce company says it expects revenue growth in 2022 to be lower than the 57 per cent growth it achieved in 2021, a year that saw Shopify’s stock hit a high of $1,762.92 last November as it held the position of most valuable company in Canada. Shares of the company closed the trading session Wednesday at $743, a decline of more than 16 per cent.
“We believe that the COVID-triggered acceleration of e-commerce that spilled into the first half of 2021 in the form of lockdowns and government stimulus will be absent from 2022, and there is caution around inflation and consumer spend near term,” the company said in a statement alongside the release of fourth-quarter financial results.
Shopify (SHOP) (SHOP.TO), which provides software and other services for e-commerce, saw its business boom through the COVID-19 pandemic as retailers rapidly shifted online. But there have been questions about whether the company can sustain the e-commerce growth spurred by the onset of the pandemic.
Technology stocks have tumbled in 2022, with the tech-heavy NASDAQ index down 11.5 per cent so far this year. Shopify’s stock is down more than 46 per cent this year.
Shopify, which reports its financial results in U.S. dollars, saw total sales in the three-month period ending Dec. 31 hit $1.38 billion, an increase of 41 per cent compared to the same time last year. On an adjusted basis, gross profit increased 37 per cent, from $510.6 million last year to $700.6 million in 2021.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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