Shopify (NYSE:SHOP) stock was a pandemic supCerstar. From the end of 2019 to last November, SHOP stock delivered a spectacular 314% return.

The Canadian ecommerce company was signing up new vendors at a rapid pace, and the surge in online shopping saw the company posting record numbers. During the Black Friday and Cyber Monday weekend in 2020, Shopify reported $ 5.1 billion in sales. The year before, that long weekend generated $ 2.9 billion — so it was a 76% jump. In 2021, the $ 6.3 billion in Black Friday/Cyber Monday sales was still a record, but it was clear that the pace of growth was slowing significantly. By then, the rapid decline in SHOP stock had begun.

SHOP stock has lost over 75% of its value in 2022. Compared to pandemic prices, it’s dirt cheap. However, buying Shopify stock now with the expectation that it will return to growth any time soon would be a mistake.

Market Reaction Negative to SHOP Stock Split

The latest news around Shopify has nothing to do with sales numbers. Instead, it’s a 10-for-1 stock split the company implemented. While the move makes SHOP stock more affordable for individual investors, there seemed to be another motive as well. As reported by Reuters when the split was announced, the unsaid reason for the split was to defend against hostile takeovers. With SHOP stock down so dramatically, that was a real concern.

On June 29, the stock split was successfully implemented. And SHOP stock proceeded to drop further. Clearly, the market was not impressed with Shopify’s strategy.

Slowing Growth Is Trouble for Shopify

The early stages of the pandemic saw physical store closures and a big increase in online shopping. As an ecommerce platform, that worked very much in Shopify’s favor. The company’s easy to implement, turnkey solutions also proved extremely popular with small businesses that had to get a web presence launched quickly, but wanted to retain their own brand and identity instead of being just one of a faceless crowd of marketplace vendors on one of the ecommerce giants. 

To help support this growth, Shopify spent money on building out distribution and delivery infrastructure. It has continued that spending, including a $ 2.1 billion deal announced in May to buy U.S. fulfillment specialist Deliverr. Those kind of expenses as growth is slowing have not helped SHOP stock. In the long-term, the moves might prove to be the right ones, but they are going to prove painful for shareholders for some time.

In its latest quarter, the company posted a net loss of $ 1.5 billion. However, revenue was up 22% year-over-year. And Shopify still has $ 7.25 billion in cash and cash equivalents. To be clear, I’m not suggesting that Shopify is in any earth-shattering danger, but the numbers are not going to improve overnight. They make it difficult to justify SHOP stock anywhere near last year’s valuation.

Should You Buy SHOP Stock? 

A lot of stocks are underperforming these days. However, Shopify’s dismal showing in 2022 — losing over three quarters of its value since the start of the year — is next level bad. It’s even worse when you look at what has happened since SHOP stock hit its all-time high close last November. (Then the loss grows to over 80%).

The thing is, unlike many of the other tech stocks that have been hammered in 2022, there is little hope that relief from macroeconomic factors like record inflation and high interest rates are going to halt the carnage. The company has been spending big bucks on building its logistics and delivery capabilities even as traffic to its platform has declined. Even in a rosy economic climate, it will take some time for Shopify’s business to justify those expenses.

It was full of promise through the pandemic, but Shopify has struggled to deliver in the post-pandemic world. At this point, SHOP stock earns a “D” rating in Portfolio Grader and does not deserve a spot as a growth stock in your portfolio.

Published First on InvestorPlace. Read Here.

Image Credit: by Ketut Subiyanto; Pexels; Thank you!