Shopify's Offering Is 'More Cash For Its Shopping Cart,' Credit Suisse Says
Shopify Inc’s (NYSE: SHOP) recent secondary offering seems to be a positive, since it offers the company “increased flexibility to fund future growth strategies,” Credit Suisse’s Michael Nemeroff said in a report. He resumed coverage of the company with an Outperform rating and a price target of $46.
Analyst Nemeroff mentioned that Shopify could use invest the funds from the recent secondary offering into:
- R&D for continued product development
- Boost sales and marketing for partner programs and community engagement as well as increased Shopify Plus headcount
- Expansion of network infrastructure to support strong subscriber growth
- Potential M&A in the future to enhance the company’s product roadmap
Nemeroff recommended investors to buy Shopify’s shares, citing the following reasons:
- The company has a leading integrated cloud-based commerce platform for SMBs
- The secular growth in ecommerce and “convergence of multiple retail sales channels (digital and brick-and-mortar)”
- The company has a very scalable platform, with a large third-party ecosystem
- Shopify enjoys significant competitive advantages
- The company has “a unique share-based pricing model that scales with its customers' success”
- There are international growth opportunities
- Recent initiatives, such as social channels, Shipping, Kit CRM and Shopify Capital, currently seem to be in the initial stages of monetization
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Latest Ratings for SHOP
|Dec 2016||Oppenheimer||Initiates Coverage On||Perform|
|Nov 2016||BTIG Research||Initiates Coverage On||Buy|
|Oct 2016||Dundee||Initiates Coverage On||Neutral|
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