In a research report issued Wednesday, Canaccord’s top analyst Richard Davis reiterated a Buy rating on shares of Shopify Inc (NYSE:SHOP), while raising the price target to $68 (from $52), following solid earnings results. The e-commerce software maker reported 4Q16 revenue of $130.4 million, exceeding consensus estimate of $121.6 million driven by strength across both Subscription and Merchant solutions.
Davis commented, “As we suggested in our preview, Shopify delivered an exemplary quarter and revenue growth outlook. The guide mirrored 12 months ago when the company pulled down operating leverage expectations based on a legitimate view that the market is ripe for expansion. We get it, as will most growth investors. We suppose the negative is that modest operating leverage slightly truncates the number of investors who will consider buying the stock (e.g., those who want more bottom-line gains will wait). We do not believe this will be an issue for the stock because given the high probability that Shopify will execute well this year and beyond, there should be plenty of growth investors waiting in line to buy this stock now, and especially on any dips.”
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Richard Davis has a yearly average return of 13.5% and a 67% success rate. Davis has a 73.7% average return when recommending SHOP, and is ranked #38 out of 4453 analysts.
Out of the 6 analysts polled in the past 6 months, five rate Shopify stock a Buy, while only one rates the stock a Hold. With an upside potential of 6.5%, the stock’s consensus target price stands at $62.88.