This Top Analyst Bets Shopify Inc (US) (SHOP) Could Score Upside

Baird's Colin Sebastian continues to sing the praises of SHOP as a top e-commerce sector pick, especially after a $1 billion+ GMV holiday weekend.


Shopify Inc (US) (NYSE:SHOP) revealed this morning that its merchants reached beyond $1 billion in gross merchandise volume (GMV) over a holiday weekend that spanned from Black Friday to Cyber Monday. With sales trends looking good, one expert on the Street is aiming for prospective upside for shares for the Canadian e-commerce platform.

Top analyst Colin Sebastian at Baird finds trends looked “solid” based on his sales tracker for the weekend, which likewise has him betting Shopify’s platform generated around $320 million in GMV on Black Friday, a whopping $400 million through the course of the weekend, and another $340 million for Cyber Monday. Such a strong weekend of sales indicates around 11.4% of Sebastian’s fourth quarter GMV projection of $8.8 billion, which would suggest a 60% year-over-year lift in gross merchandise volume for the company.

In reaction, the analyst reiterates an Outperform rating on SHOP stock with a price target of $110, which implies a close to 2% downside from where the stock is currently trading.

“While Shopify did not provide Y/Y comparisons, the company did disclose that peak Black Friday orders were approximately double peak orders from the year before. Additionally, mobile sales continue to grow at an impressive pace, accounting for 64% of total weekend sales. Given strong early holiday sales trends and the added variable contribution from Merchant Solutions, we believe SHOP is likely tracking above our Q4 revenue targets at this point, with potential upside to our estimates if holiday sales momentum continues,” highlights Sebastian.

Meanwhile, the analyst cheers that “e-commerce data points remain positive through yesterday,” adding, “We continue to expect some moderation in growth as merchants ease off of promotions from the Cyber Week shopping period.”

Overall, there is no question for Sebastian that Shopify remains one of his “top e-commerce sector picks,” an e-commerce player that is “well-positioned to capitalize on the strong seasonal growth trends.”

Colin Sebastian has a very good TipRanks score with a 78% success rate and a high ranking of #17 out of 4,724 analysts. Sebastian garners 26.3% in his annual returns. When recommending SHOP, Sebastian yields 92.1% in average profits on the stock.

Wall Street tilts toward the bulls when it comes to this e-commerce stock, with TipRanks analytics demonstrating SHOP as a Buy. Based on 13 analysts polled by TipRanks in the last 3 months, 8 rate a Buy on Shopify stock while 5 maintain a Hold. The 12-month average price target stands at $110.91.

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