Shopify Remains The Best Way To Play Secular Trends Shaping Digital Commerce

BTIG affirmed its Buy rating on Shopify Inc SHOP saying the software maker’s full-year revenue outlook could be conservative as the growth story remains very much intact.

Print Gist

• Shopify Q4 EPS $0.00 versus $(0.02) estimate.
• Revenue of $130.4 million versus $121.6 million estimate.
• Shopify sees FY 2017 revenue of $580 million to $600 million versus estimate of $563 million.
• Shopify sees Q1 revenue at $120 million–$122 million versus estimated $117 million.

Stock Movement

After strong results, shares of Shopify soared to an all-time high on Wednesday. Analyst Abhinav Kapur believes that the stock movement reflects the possibility to exceed this outlook in FY 2017 and potentially even greater than $850 million in FY 2018.

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Notably, Shopify’s GMV more than doubled for the fourth consecutive year. But, Kapur was surprised with the management’s allusion to further improvement in the take rate in FY 2017.  The analyst had expected the take rate to begin declining in FY 2017 and beyond as the company scales its Plus initiative.

Analyst's Commentary

Kapur said a flat take rate adds more than $10 million to his estimates in FY 2017 and $35 million in 2018.

“Ultimately, we think Shopify remains the best way to play the secular trends shaping digital commerce,” Kapur wrote in a note.

At last check, shares of Shopify were up 0.45 percent to $60.84. Kapur has a price target of $65.