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Shopify
stock surged to a new high Thursday, as Wall Street ratchets up expectations for the company’s June quarter earnings, coming next week.
Shopify shares on Thursday rose almost 2% to $1,599.22, and traded as high as $1,602.57, an intraday record. The stock has rallied 41% year to date, boosting its market cap above $200 billion.
Scrambling to keep up with the surging share price, Wall Street analysts are lifting their targets on the stock.
Street consensus estimates call for Shopify (ticker: SHOP) to report revenue of $1.04 billion, with earnings of 96 cents a share. The e-commerce software company reports before the market opens next Wednesday. Shopify didn’t provide specific guidance for the quarter. In the March quarter, the company posted revenue of $988.6 million, up 110% from a year earlier, and more than $100 million ahead of Street expectations—the surge in the stock price in recent weeks suggests investors expect another blowout.
Susquehanna Financial Group analyst John Coffey on Thursday repeated his Positive rating on Shopify shares, lifting his target price to $1,800 from $1,500. Coffey says Shopify is “under-penetrated” in Europe outside the U.K., but he says the company’s commitment to boost operating spending this year is focused in particular on expanding its European business. He thinks the European push can fuel growth in the company’s customer count — and that has spurred the analyst to boost his 2022 and 2023 revenue forecasts.
Roth Capital analyst Darren Aftahi likewise repeated his Buy rating, while boosting his price target to $1,750, from $1,530. Aftahi writes that his current model for the quarter calls for 34% growth in gross merchandise value, but that a proprietary survey of Shopify merchants suggests the figure could come in above 50%. If that happens, revenue could top $1.1 billion, he says, which would be way above most Street estimates.
Stifel analyst Scott Devitt also reiterated his Buy rating on Shopify on Thursday, upping his target price to $1,600, from $1,400.
“Shopify has a proven track record of creating products and services that generate value for merchants, and expect ongoing investments will generate monetization improvements as the platform continues to scale,” he writes. The key to the stock’s reaction to quarterly results, he writes, is likely to be the company’s commentary on the third quarter and the rest of the year, “as the company faces challenging prior year compares during a period of reopening.”
Write to Eric J. Savitz at [email protected]