Market Overview

Shopify Downgraded At Morgan Stanley After Shares Rise 70%

Share:
Shopify Downgraded At Morgan Stanley After Shares Rise 70%

Following the 70 percent year-to-date appreciation in the share price of Shopify Inc (NYSE: SHOP), Morgan Stanley’s Brian Essex believes the risk-reward is now balanced.

Essex downgraded the rating on the company from Overweight to Equal Weight, while raising the price target from $37 to $47.

Solid Execution

The analyst believes the share price appreciation was driven by robust execution, with Shopify having been able to grow revenues over 90 percent with more than 100 percent GMV growth over the past 3.5 years.

Related Link: Macquarie Analyst Lists Competitive Advantage Of Shopify

“Following this pattern, the company delivered another beat and raise quarter in 2Q, reporting revenue growth of 92.9 percent y/y in 2Q, with upside vs. guidance driven by strong merchant adds and subscription pricing tailwinds,” Essex mentioned.

GMV also beat expectations, with growth accelerating to 106 percent year-on-year and payment volumes processed crossing the $1 billion mark during Q2.

Channel Checks

Morgan Stanley’s survey of Shopify Experts indicated that revenue growth has been robust in Q3.

“Management guided to revenue between $93 million and $95 million for 3Q with full year revenue between $361 million and $367 million. The midpoint of guidance implies that revenue growth decelerates to 78 percent y/y in 3Q from 93 percent last Q with full year revenue growth at the midpoint of 77 percent y/y,” the analyst stated.

However, Essex expects the company to beat the guidance for Q3, as well as for the full year.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for SHOP

DateFirmActionFromTo
Jan 2021Roth CapitalMaintainsNeutral
Jan 2021KeyBancMaintainsOverweight
Jan 2021OppenheimerUpgradesPerformOutperform

View More Analyst Ratings for SHOP
View the Latest Analyst Ratings

 

Related Articles (SHOP)

View Comments and Join the Discussion!

Posted-In: Brian Essex Morgan StanleyAnalyst Color Downgrades Price Target Analyst Ratings Tech Best of Benzinga

Latest Ratings

StockFirmActionPT
AAPLNeedhamMaintains170.0
TLMDRBC CapitalInitiates Coverage On10.0
VIACCredit SuisseDowngrades37.0
SIRICredit SuisseDowngrades7.3
HELEOppenheimerDowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com