TORONTO (Reuters) - Shopify Inc SHOP.TOSHOP.N defended its business model on Thursday, a day after short-seller Citron Research criticized the internet-commerce software provider's marketing practices, wiping about $1.5 billion off its market value.

Canadian e-commerce company Shopify Inc logo is shown on a computer screen in the illustration photo in Encinitas, California May 3, 2016. REUTERS/Mike Blake/File Photo

“We vigorously defend our business model and stand resolutely behind our mission and the success of our merchants,” Shopify said in a statement. The company said that retailers using its software generated $10.7 billion in gross merchandise volume in the first half of the year.

Shopify shares were down 1.7 percent at $101.53 in midday trade on the New York Stock Exchange, after plunging as much as 9.7 percent earlier in the session. The stock fell 11.6 percent on Wednesday after Citron founder Andrew Left said the company “oversells” the potential for its customers to make money..

The fast-growing but unprofitable company has lost around $1.5 billion of market value since Citron released its report on Wednesday, in which it gave the stock a $60 price target.

The allegations in the report will likely hang over Shopify’s stock performance at least until the company’s next earnings release on Oct. 30, said Paradigm Capital analyst Kevin Krishnaratne.

“This is a stock that nearly tripled year-to-date, so a breather was probably due to occur,” said Krishnaratne, who has a “buy” on the shares and a $120 price target.

The stock is expensive relative to peers, currently trading at an enterprise value of more than nine times next year's average sales. Rivals including Workday Inc WDAY.O, Kinaxis Inc KXS.TO and Zendesk Inc ZEN.N trade at an enterprise value of about six times next year's sales forecast, he said.

Shopify has been a darling with Canadian investors since its initial public offering in 2015, when it set an IPO price of $17.

Its U.S.-listed shares were changing hands at more than five times the average daily volume on Thursday, while volumes on the Toronto Stock Exchange were double the 90-day average.

Shopify has yet to turn a profit since it was founded in 2004.