Market Overview

Analyst Starts Neutral Coverage On Shopify Due To Valuation

Share:
Analyst Starts Neutral Coverage On Shopify Due To Valuation

While Shopify Inc (NYSE: SHOP) has strong long-term earnings growth prospects, these seem to be “fully reflected” in its current share price, according to Loop Capital.

The Analyst

Loop Capital’s Anthony Chukumba initiated coverage of Shopify with a Hold rating and price target of $420.

The Thesis

Shopify offers a robust multichannel commerce platform at very attractive price points, which translates to “a compelling merchant value proposition,” Chukumba said in the note.

He added that Shopify’s total addressable market is both large and fast growing and that the company is “uniquely positioned” to benefit from the expected high growth of ecommerce globally.

See Also: Mizuho Says Shopify Has Attractive Fulfillment Opportunity, Investments Could Weigh On Margins

The analyst said that Shopify's total addressable market expands further due to its efforts to increase brand awareness, service more large enterprise customers through Shopify Plus and expand internationally by developing localized websites.

Chukumba believes that the company has “plenty of opportunities” to provide a larger array of products and services to increase merchant retention on its platform and grow its revenue stream.

These long-term earnings growth prospects are already fully reflected in the stock, the analyst said, while recommending to wait for “a more attractive entry point.”

Price Action

Shares of Shopify were trading flat at $448.97 at time of publication.

Latest Ratings for SHOP

DateFirmActionFromTo
Oct 2020Roth CapitalMaintainsNeutral
Oct 2020KeyBancMaintainsOverweight
Oct 2020Morgan StanleyInitiates Coverage OnEqual-Weight

View More Analyst Ratings for SHOP
View the Latest Analyst Ratings

 

Related Articles (SHOP)

View Comments and Join the Discussion!

Posted-In: Anthony Chukumba Loop CapitalAnalyst Color Price Target Initiation Analyst Ratings

Latest Ratings

StockFirmActionPT
ZZZScotiaBankMaintains27.0
FSVScotiaBankMaintains128.0
FNScotiaBankMaintains38.0
CSUScotiaBankMaintains1,600.0
CXOScotiaBankDowngrades43.0
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