Top analyst Colin Sebastian at Baird is out with a bullish research note on Shopify Inc (US) (NYSE:SHOP) on the heels of hosting investor meetings with the Canadian e-commerce platform, leaving him feeling momentum is on SHOP’s side. As such, the analyst reiterates an Outperform rating on shares of SHOP with a $95 price target, which represents a just under 6% increase from where the stock is currently trading.
Is Shopify the next Amazon, but for sellers? As far as the analyst sees it, the answer is yes, as he deems Shopify “the e-commerce platform for merchants.” In fact, “Just as Amazon is the leading e-commerce platform for online buyers, Shopify views its role in the market as the platform for sellers, which is driving further investment to expand product capabilities,” adds Sebastian.
Moreover, the analyst believes that by the fourth quarter, SHOP will hit its “key profitability milestone” while also transitioning to “public cloud providers to reduce capital investment (could increase operating expense), as well as additional M&A opportunities to feed the core growth engine”
Ultimately, for Sebastian, these “meetings highlight ongoing growth orientation […] reflecting an upbeat tone regarding multiple growth vectors in the business, including new product offerings, and more broadly, the company’s strong and defensible position as the leading platform for e-commerce merchants. Shopify is one of our top SMID-cap picks again for 2017, and we continue to believe that the combination of strong merchant adoption, increasing monetization, expanding portfolio of services, and path to profitability, provide further upside potential.”
Colin Sebastian has a very good TipRanks score with a 78% success rate and a high ranking of #16 out of 4,554 analysts. Sebastian realizes 22.5% in his yearly returns. When recommending SHOP, Sebastian garners 110.5% in average profits on the stock.
TipRanks analytics indicate SHOP as a Buy. Out of 14 analysts polled by TipRanks in the last 3 months, 9 are bullish on Shopify stock while 5 remain sidelined. With a loss potential of nearly 7%, the stock’s consensus target price stands at $83.80.
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