Group 1: Fund Performance - Loomis Sayles Global Growth Fund returned -3.05% in Q4 2025, underperforming the MSCI ACWI Index Net which returned 3.29% [1] - The Fund focuses on high-quality companies with competitive advantages and long-term growth drivers [1] Group 2: Shopify Inc. Overview - Shopify Inc. is a leading global provider of e-commerce technology, offering a cloud-based platform for businesses to manage their retail operations [3] - The company experienced a one-month return of -28.98% and a 52-week loss of 13.78% [2] - As of February 12, 2026, Shopify's stock closed at $110.66 per share, with a market capitalization of $144.421 billion [2] Group 3: Shopify Inc. Business Model - Shopify's platform provides an end-to-end solution for merchants, enabling them to manage sales across various channels including web, mobile, and physical retail [3] - The company generates approximately 71% of its revenues in North America, with Europe, the Middle East, and Africa contributing 19%, and Asia-Pacific accounting for 10% [3] - Shopify aims to simplify the commerce process for merchants, empowering them to realize their potential [3]

Core Insights - Shopify Inc. reported a 31% year-over-year revenue growth in Q4 2025, reaching $3.67 billion, exceeding analysts' expectations of $3.59 billion [1] - The company's earnings per share (EPS) of $0.57 also surpassed the consensus estimate of $0.51 [1] - Management highlighted that the strong performance was driven by international revenue growth, offline revenue growth, and B2B GMV growth [3] Financial Performance - Shopify maintained a free cash flow margin of 19%, achieving ten consecutive quarters of double-digit free cash flow margins [3] - The company is investing in various initiatives, including Catalog, Sidekick, Universal Commerce Protocol, and its comprehensive platform of commerce solutions [3] Market Sentiment - MoffettNathanson upgraded Shopify from Neutral to Buy, raising the price target from $122 to $150, citing it as an "unusually attractive entry point" and a "long-term winner in the AI commerce wars" [4]

Core Viewpoint - The software sell-off in the market is viewed as illogical by Nvidia CEO Jensen Huang, who believes that concerns about AI replacing software companies are misplaced [1][3]. Industry Overview - The S&P North American Technology Software Index has declined by 30% from its record high in September, entering bear market territory, primarily due to fears surrounding artificial intelligence [1][2]. Company Analysis: Shopify - Shopify is an e-commerce software provider that enables merchants to manage sales across various platforms, including physical and digital stores [5]. - The company has been recognized as a leader in digital commerce by Gartner, highlighting its rapid innovation and enterprise-grade reliability [6]. - Shopify is actively integrating AI into its operations, having collaborated with Google on the Universal Commerce Protocol, which has led to a 15x increase in orders from AI search since January 2025 [7]. - Currently, Shopify trades at 75 times adjusted earnings, with earnings expected to grow by 30% in 2026, and a price-to-sales ratio of 10, which is below its three-year average of 14 [8][9]. - Analysts project a median target price of $162.50 per share for Shopify, indicating a potential upside of 55% from its current price of $105 [10]. Company Analysis: AppLovin - AppLovin specializes in adtech software, initially focusing on mobile gaming and recently expanding into web-based advertising with a self-service platform [11]. - The company’s Axon machine learning ad engine is noted for its effectiveness, providing a 45% higher return on ad spending compared to Meta Platforms and a 115% higher return compared to other platforms [12][13]. - AppLovin is currently valued at 38 times earnings, with projected earnings growth of 50% in 2026, and analysts have set a median target price of $710 per share, suggesting a 92% upside from the current price of $370 [14].

Core Insights - Shopify reported a mixed fourth-quarter performance with strong revenue growth but missed earnings expectations, posting earnings of 46 cents per share, which was 8.69% below the Zacks Consensus Estimate, although it improved from 44 cents per share a year ago [1][2] Revenue Performance - Revenues increased by 31% year over year to $3.67 billion for the fourth quarter, surpassing the Zacks Consensus Estimate by 2.55%, driven by strength in merchant solutions and payments penetration [2][9] Stock Performance and Valuation - Shopify shares have declined by 21% over the past six months, underperforming the Zacks Computer and Technology sector's 10.4% return and the Zacks Internet - Services industry's 50.1% surge [3] - The stock is considered overvalued with a Value Score of F, trading at 10.8X forward 12-month price-to-sales, significantly above the sector's 6.54X and sub-industry's 7.21X [6][9] Operational Efficiency - Shopify generated $715 million in free cash flow with a 19% free cash flow margin, and operating income reached $631 million for the quarter, with operating expenses as a percentage of revenue improving by 300 basis points year over year [10][11] - Gross profit rose by 25% year over year to $1.69 billion, although gross margin faced pressure from a higher contribution of lower-margin Merchant Solutions revenues [11] Strategic Initiatives - Shopify's investments in AI-driven commerce infrastructure position the company to participate in emerging transaction surfaces, co-developing the Universal Commerce Protocol with Google and rolling out Agentic Storefronts [14] - International momentum is strong, with European merchants recording 45% reported GMV growth in the fourth quarter, indicating rising penetration into larger commerce operations [15] Long-term Growth Outlook - The Zacks Consensus Estimate for Shopify's 2026 EPS is pegged at $1.78, reflecting a year-over-year improvement of 52.14% [12] - The company's strategic positioning in agentic commerce and strong international momentum establishes a foundation for long-term growth, despite the stock trading at a significant premium to the sector and peers [16]

Group 1 - UBS has lowered the target price for Shopify from $165 to $145 [1]

Core Insights - Shopify is a leading e-commerce platform that supports over 5 million businesses globally, providing tools for online store creation, inventory management, payment processing, and multi-channel selling [1][2] Company Overview - Founded in 2006 and headquartered in Ottawa, Canada, Shopify operates in over 175 countries, offering localized payment solutions and language support to merchants across various regions [2] Stock Performance - Shopify's stock has experienced significant declines, with a 1.5% drop over the past five days, a 35% decrease in the last month, and a 30% decline over three months. Year-to-date, the stock is down 32%, although it has shown a 52-week loss narrowed to 9% [3][4] Financial Results - In Q4 2025, Shopify reported a 30% year-over-year revenue increase to $3.67 billion, surpassing Wall Street's forecast of $3.58 billion. This growth was attributed to holiday shopping, enterprise wins, and AI-driven tools [5] - Gross profit rose by 31% to $2.81 billion, indicating strong pricing power and higher-value services, although EPS of $0.46 fell short of the $0.50 consensus [5] - Key metrics included a 29% increase in Gross Merchandise Volume (GMV) to $123.8 billion, with merchant solutions revenue up 31% and subscriptions growing by 27% [6] Operational Efficiency - Free cash flow reached $715 million, reflecting a 19% margin and significant year-over-year growth, highlighting operational leverage from cost discipline [6] - Operating expenses increased moderately due to investments in AI and global expansion, while cash reserves remain healthy to support ongoing innovation [6]

Core Insights - Shopify reported fourth-quarter revenues of $3.67 billion, exceeding the Zacks Consensus Estimate by 2.55% and showing a year-over-year increase from $2.81 billion, driven by strong holiday shopping activity [1] - Adjusted earnings per share were 48 cents, slightly below the Zacks Consensus Estimate of 50 cents but up from 44 cents in the previous year [2] - The company forecasts free-cash-flow margins in the "low-to-mid teens" for the first quarter, slightly below year-ago levels, due to ongoing investments in AI tools [3] Financial Performance - Shopify's gross merchandise volume (GMV) surged 29% year over year to $123.8 billion, surpassing analysts' estimates of $121.3 billion [5] - The company expects first-quarter revenue growth in the "low-thirties percentage range" year over year, exceeding analysts' projected growth of 25.1% [6] Shareholder Actions - Shopify's board approved a $2 billion share repurchase program, indicating management's confidence in its stock [7] - The stock is not heavily indebted, but its valuation remains a concern due to a high price/earnings ratio of 92.20X compared to the Internet – Services industry average of 28.44X [8] Market Context - Shopify's shares have declined by as much as 29.2% over the past month, impacted by broader AI-related concerns in the software sector [4] - Despite fears of an AI-led software rout, Shopify's President believes that platform and infrastructure companies are better positioned than feature-based providers [4] - Investors may consider Shopify-heavy ETFs like ARK Blockchain & Fintech Innovation ETF (ARKF) and First Trust Dow Jones International Internet ETF (FDNI) to mitigate single-stock risk amid AI-driven volatility [9][10]

Core Viewpoint - Shopify (SHOP) experienced a significant decline of 10.2% on Thursday morning, marking the second consecutive day of substantial drops despite the company providing a quarterly revenue guidance that exceeded expectations. However, the fourth-quarter earnings fell short of expectations [1][2]. Summary by Relevant Sections - **Stock Performance**: Shopify's stock fell by 10.2% on Thursday, following a 6.7% drop on Wednesday, indicating a trend of declining investor confidence [1][2]. - **Earnings Guidance**: The company reported a quarterly revenue guidance that was higher than anticipated, suggesting potential growth in revenue [1][2]. - **Fourth Quarter Earnings**: Despite the positive revenue guidance, the fourth-quarter earnings did not meet market expectations, contributing to the stock's decline [1][2].

Core Insights - Shopify reported fourth-quarter 2025 non-GAAP earnings of 38 cents per share, missing the Zacks Consensus Estimate by 7.32%, while revenues of $3.67 billion surpassed estimates by 2.55%, marking a year-over-year increase of 30.6% [1][9] Revenue Performance - Gross Merchandise Volume (GMV) in Q4 was $123.84 billion, up 31.1% year over year, with offline GMV increasing by 29% and B2B GMV surging 84%. International GMV grew by 50%, with Europe’s GMV rising 45% year over year [2] - Merchant solutions revenues reached $2.89 billion, accounting for 78.8% of total revenues, with a year-over-year increase of 34.9% driven by strong GMV and increased penetration of Shopify payments [3] - Subscription solutions revenues were $777 million, making up 21.2% of total revenues, with a year-over-year increase of 16.7% [4] Profitability Metrics - Gross profit for Q4 was $1.69 billion, reflecting a 25.2% year-over-year increase, although gross margin contracted by 200 basis points to 46.1% due to a mix shift from higher-margin Subscription Solutions to lower-margin Merchant Solutions [5] - Merchant Solutions' gross profit increased by 30%, while Subscription Solutions' gross profit grew by 18%, with respective gross margins of 36.8% and 81% [6] Operating Expenses - Total operating expenses were $1.06 billion, up 19.7% year over year, with Sales & Marketing expenses increasing by 24.4% to $433 million, R&D expenses rising by 11.1% to $390 million, and G&A expenses surging by 11.6% to $125 million [7] - Despite the increase in operating expenses, as a percentage of revenues, total operating expenses declined by 260 basis points to 28.9% [8] Future Guidance - For Q1 2026, Shopify expects revenues to grow at a low-30% rate year over year and gross profit to grow at a high-20% rate year over year, with GAAP operating expenses as a percentage of revenues projected to be in the 37-38% range [11]

Core Viewpoint - The article summarizes significant rating changes from Wall Street, highlighting companies with upgraded, downgraded, and newly initiated ratings, which are crucial for investors to consider. Upgraded Ratings - Shopify (SHOP) upgraded from Hold to Buy by Cowen Group with a target price of $159, citing valuation advantages as the stock has dropped 30% this year and strong quarterly performance provides an attractive entry point [2] - BorgWarner (BWA) upgraded from Hold to Buy by Deutsche Bank, with the target price raised from $46 to $82, noting the company's critical transformation into the AI data center market [2] - Analog Devices (ADI) upgraded from Equal Weight to Overweight by Barclays, with the target price increased from $315 to $375, emphasizing its high industrial business share in the analog chip sector [2] - MercadoLibre (MELI) upgraded from Neutral to Overweight by JPMorgan, with the target price raised from $2650 to $2800, due to more attractive valuations following recent stock price weakness [2] - Fastly (FSLY) upgraded from Market Perform to Outperform by William Blair, with no target price set, highlighting exceptional quarterly performance driven by increased AI traffic contributions [2] Downgraded Ratings - Coinbase (COIN) downgraded from Buy to Sell by Monness Crespi, with a target price of $120, as the firm revised down earnings forecasts ahead of its quarterly report, deeming previous assumptions about a steady recovery in cryptocurrency by 2026 as overly optimistic [3] - Kraft Heinz (KHC) downgraded from Neutral to Underweight by JPMorgan, with the target price lowered from $24 to $22, despite exceeding fourth-quarter expectations, as 2026 organic sales and profit outlooks fall short of market expectations [3] - Icon (ICLR) downgraded from Neutral to Underperform by Bank of America, with a significant target price cut from $195 to $75, due to an internal investigation revealing potential revenue inflation [3] - Inspire Medical (INSP) downgraded from Overweight to Equal Weight by Wells Fargo, with the target price reduced from $145 to $70, citing uncertainties in reimbursement policies affecting stock prices [4] - Humana (HUM) downgraded from Outperform to Market Perform by Royal Bank of Canada, with the target price lowered from $322 to $189, as the risk-reward balance has become neutral following strong growth amid reimbursement policy uncertainties [4] Initiated Coverage - Microchip Technology (MCHP) initiated coverage with a Neutral rating and a target price of $80 by Barclays, noting risks of market share loss in the microcontroller sector [5] - ON Semiconductor (ON) initiated coverage with a Neutral rating and a target price of $75 by Barclays, highlighting high exposure to the Chinese market and automotive sector as a suppressive factor [5] - Sterling Infrastructure (STRL) initiated coverage with a Buy rating and a target price of $486 by Stifel, as the largest earthmoving contractor in the U.S. is expected to benefit from long-term growth themes [5] - D-Wave Quantum (QBTS) initiated coverage with a Buy rating and no target price set by Cowen Group, citing the company's leading position in quantum annealing driving growth and high margins [5] - Immunome (IMNM) initiated coverage with a Buy rating and a target price of $40 by H.C. Wainwright, as the company builds a differentiated pipeline in oncology with significant advantages in solid and hematologic tumors [5]