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Baron Fifth Avenue Growth Fund says Shopify decline was driven by multiple compression
The fund attributed SHOP weakness in Q2 to a P/E multiple drop, while citing 30% gross merchandise volume and 32% revenue year-over-year growth.
Baron Capital, an investment management company, said Shopify Inc. (SHOP) detracted from performance in its second-quarter 2026 investor letter for the Baron Fifth Avenue Growth Fund. According to the letter, SHOP fell 3.7% in the quarter, with the decline driven by multiple compression, not by any deterioration in the underlying business or fundamental outlook. The outlet reported that Shopify’s P/E was down 8.5%, contributing to the stock’s pullback during Q2. The letter also pointed to operating momentum, noting Shopify continued to post year-over-year growth in gross merchandise volume and revenue, up 30% and 32% respectively. On August 31, 2026, Shopify closed at $147.37 per share. For context, the fund reported a gain of 24.6% for Q2 2026 on institutional shares, outperforming the Russell 1000 Growth Index and the S&P 500. Year to date, the fund was up 11.7%, after a 10.4% drawdown in Q1 tied to geopolitical tensions and a rebound in Q2 following a cease-fire and declining oil prices.
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