Shopify Stock Can Climb Even Higher, With Strong Earnings Ahead, Analyst Says – Barron’s
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Driven by continued acceleration in the adoption of online shopping, Shopify is likely to report better-than-expected June quarter results later this month, KeyBanc says.
Analyst John Beck repeated his Overweight rating on Shopify stock (ticker: SHOP), lifting his price target to $1,125 from $1,000. He expects the e-commerce software company to post revenues of $523.2 million and earnings of five cents a share, well above the Wall Street consensus forecast of $505 million in revenue and a loss of two cents a share.
Likewise, for the September quarter, he sees $559 million in revenue, above the Street at $531.1 million. For the full year, he expects $2.25 billion, above consensus at $2.18 billion.
The analyst bases his new target on a multiple of 42.3 times enterprise value to projected 2021 sales, reflecting his view that the company could eventually serve in the low millions of merchants, with 50% eventual growth in average annual recurring revenue per merchant. While Beck isn’t the only analyst with a bullish view of the quarter, other analysts have become wary about the stock’s high valuation, which is among the highest in the tech sector.
The analyst writes that Shopify “continues to benefit from a dramatic race for retailers and merchants to launch online initiatives in the wake of brick-and-mortar shutdowns.”
Write to Eric J. Savitz at eric.savitz@barrons.com