In boxing there’s a move called the pull counter, where the fighter pulls back from an opponent while throwing a counterpunch.

It can be an effective technique — just ask Floyd Mayweather — but it does require good timing.

In the stock market, a pullback is a reverse to a pause or dip in a stock price. Pullbacks are widely seen as buying opportunities, and the term came up recently in reference to Shopify (SHOP) .

The e-commerce platform, which makes tools for companies to sell products online, was founded in 2006 by Tobias Lütke and Scott Lake.

The pair were attempting to open an online store for snowboarding equipment, and Lütke, a computer programmer, was dissatisfied with the existing e-commerce products on the market. So, he built his own.

The company, which now has a market capitalization of $80.65 billion, reported first-quarter earnings on Wednesday.

President sees ‘strongest version of Shopify yet’
“The start of 2024 has been very strong for Shopify with more and more merchants thriving on our platform,” Harley Finkelstein, Shopify’s president, said during the company’s earnings call.

“This is the strongest version of Shopify yet. We’re helping millions of merchants around the world to both start and scale their businesses,” he added.

As far as the numbers go, Shopify posted first-quarter earnings of 20 cents a share, up from 1 cent a year earlier and beating LSEG’s call for 17 cents a share.

Revenue totaled $1.86 billion, up 23% from a year earlier and coming in ahead of Wall Street’s call for $1.85 billion.

“We see consumer spend in North America remaining resilient [and] we have factored in headwinds related to [foreign exchange] from the strong U.S. dollar and some softness in European consumer spending in our Q2 outlook,” Chief Financial Officer Jeff Hoffmeister told analysts.

The company said that it expected operating expenses to increase in the low- to mid-single-digits percent quarter over quarter, while analysts were calling for little change.

In addition, gross margin for the second quarter is expected to narrow roughly 0.5 percentage point compared with the first quarter, following Shopify’s sale of its logistics business to freight forwarder Flexport last May.

The deal included Deliverr, the tech-enabled shipping services provider Shopify had bought in 2022 for $2.1 billion. The company also laid off 20% of its workforce last year.

Shopify share price tumbles after report
Shopify’s shares tumbled after the earnings report and several analysts adjusted their price targets accordingly.

Citi lowered the firm’s price target on Shopify to $95 from $105 and affirmed a buy rating on the shares.

The company’s first-quarter left a lot to be desired with “smaller beats, soft guidance and ramping spending,” the investment firm told investors in a research note.

But Citi recommends buying the stock on weakness. The firm sees the setbacks as temporary, saying Shopify’s volume suggests macroeconomic resiliency and continued share gains.

CIBC analyst Todd Coupland lowered the firm’s price target on Shopify to $85 from $100 and reiterated an outperform rating on the shares. He said the company’s second-quarter outlook for revenue and margins was weaker than expected.

Coupland said investors are wrestling with the idea of slowing growth and heightened investment required to sustain Shopify’s sales.

He said he viewed the 19% post-earnings share pullback as a buying opportunity, saying investors should do so knowing the context of lower growth, free cash flow margins, and valuation.

Analyst sees buying opportunity
Baird analyst Colin Sebastian lowered the firm’s price target on Shopify to $77 from $87 and affirmed an outperform rating on the shares.