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
Date | Firm | Action | From | To |
---|---|---|---|---|
Feb 2022 | Morgan Stanley | Maintains | Equal-Weight | |
Feb 2022 | Credit Suisse | Maintains | Neutral | |
Feb 2022 | Mizuho | Maintains | Neutral |
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Posted-In: Anthony Chukumba Loop CapitalAnalyst Color Price Target Initiation Analyst Ratings