Shopify Inc (US) (SHOP) Attracts a Price Target Hike Following Encouraging Management Meeting

Roth Capital's Darren Aftahi is enticed by SHOP's international opportunity, merchant solutions penetration, and Instagram integration.


On the heels of hosting investor meeting with the Shopify Inc (US) (NYSE:SHOP) management team, Roth Capital analyst Darren Aftahi is affirming his “positive” viewpoint on shares of the Canadian e-commerce platform.

Not only is the analyst encouraged, but Aftahi is coming out even more bullish on the company, maintaining a Buy rating on SHOP stock while lifting the price target from $119 to $127, which represents a 14% increase from current levels. (To watch Aftahi’s track record, click here)

“Incrementally we believe opportunities for International, plus Instagram and potentially new merchant solutions, should continue to drive both its P&L and shares higher, in what we view as early relative days in ramp of its platform,” the analyst writes.

Meanwhile, Shopify’s international prospects are glimmering, with merchants spanning roughly 175 countries and management enthusiastic on its long-term potential beyond the core eight countries where most of the company’s merchants reside.

“In fact, it stressed that many of its newer merchants added in the last couple of quarters were international-based and should be contributory to its model in 4Q and beyond (from a GMV and merchant solutions aspect). We believe international remains a relatively lower penetrated group of markets for SHOP and a potential long-term catalyst,” continues Aftahi.

Meanwhile, merchant solutions have the analyst optimistic considering penetration on shipping is resting at “low” numbers, leaving room for more solutions to “add value to merchants in both inventory management and marketing.”

On a final enthusiastic note, the analyst concludes pointing to Instagram: “SHOP has seen positive results from merchants that are using the IG integration on its platform, thus far. While not fully rolled out to its merchant base, our checks indicate conversion rates are significantly higher on IG than other commerce platforms (given the visual nature of the media). We believe IG may be an overlooked part of SHOP’s business.”

The Street is tilted towards the bullish camp on this Canadian e-commerce player, with TipRanks analytics demonstrating SHOP as a Buy. Based on 14 analysts polled by TipRanks in the last 3 months, 9 rate a Buy on Shopify stock while 5 maintain a Hold. The 12-month average price target stands at $109.25, marking a nearly 2% downside from where the stock is currently trading.  

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