Shopify, Roku sink following downgrades: 4 big analyst cuts

Investing.com — Here is your Pro Recap of the biggest analyst cuts you may have missed today: downgrades at Shopify, Roku , Affirm Holdings , and SolarEdge Technologies.

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Shopify drops following JMP Securities downgrade

Shopify (NYSE: NYSE:SHOP) shares fell more than 2% pre-market today after JMP Securities downgraded the company to Market Perform from Market Outperform.

According to the analysts, this decision is driven by the stock nearing their previous price target of $80, along with revisions in their model that forecast Shopify's 2025 adjusted operating income to fall 7% below the consensus.

The analysts acknowledged Shopify's strong momentum, noting its increasing share among enterprise and offline merchants and its continued dominance in attracting new merchants, with Gross Merchandise Volume (GMV) estimates exceeding consensus. However, they pointed out that as GMV growth shifts more toward enterprise customers, gross profit margins face challenges due to lower payment take rates and lower attach rates for non-payment Merchant Solutions.

Roku shares plunge on downgrade

Roku (NASDAQ:ROKU) shares fell more than 3% pre-market today after Seaport Global Securities downgraded the company to Sell from Neutral with a price target of $75.00, as reported in real-time on InvestingPro.

On Friday, the company was downgraded by MoffettNathanson. The firm cut its rating to Sell from Hold with a price target of $66.00 (from $64.00). The analysts said in a note to clients that the firm previously took its Sell view off the table as it believed the company was becoming more focused on efficiency and margin expansion. However, with Roku shares rallying lately, the firm now thinks the company's valuation is stretched relative to the top-line risks they continue to envision.

Two more downgrades

Morgan Stanley downgraded Affirm Holdings (NASDAQ:AFRM) to Underweight from Equalweight with a price target of $20.00 (from $15.00). As a result, shares dropped more than 5% pre-market today.

After +79% appreciation over the last month and +383% YTD, risk-reward appears skewed to the downside at current levels even with pending strength through a seasonally strong holiday period. Valuation seems difficult to justify across all metrics.

SolarEdge Technologies (NASDAQ:SEDG) shares fell more than 4% pre-market today after Goldman Sachs downgraded the company to Sell from Neutral with a price target of $77.00.

The analysts’ reasoning for the downgrade stems from their assessment of the European solar market, which they believe is just beginning to correct, in contrast to the U.S. market which has seen gradual contraction over the past four quarters and appears to be nearing a low point.

Moreover, we believe consensus estimates are only in the early stages of negative estimate revisions as we believe that the EU solar market, specifically residential as well as C&I, are facing many near term headwinds that will take multiple quarters to work through.

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