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Investing.com - Benchmark raised its price target on Shopify (NASDAQ:SHOP) to $140.00 from $125.00 on Tuesday, while maintaining a Buy rating ahead of the company’s second-quarter earnings report. The stock, currently trading at $124.96, has delivered an impressive 139.59% return over the past year. According to InvestingPro, Shopify’s stock is currently trading slightly above its Fair Value, with analyst targets ranging from $85 to $155.
The price target increase was attributed to a lower weighted average cost of capital (WACC) and modest positive revisions to out-year estimates, according to Benchmark’s research note.
Shopify is scheduled to report its second-quarter earnings on Wednesday, August 6, with Benchmark expecting "modest upside" to both reported and guided gross merchandise volume (GMV), citing favorably correlated U.S. non-store retail sales data and Shopify’s "unwavering higher income demo."
The research firm highlighted several key topics for management to address during the earnings call, including potential GMV growth from a speculated Shopify/ChatGPT integrated checkout, possible merchant sales conversion disruptions from Meta’s June decision to deprecate in-app checkout on Facebook (NASDAQ:META) and Instagram, and second-half gross margin variability.
Benchmark also noted interest in any commentary regarding waning U.S. consumer sentiment, which was recently cited by Criteo, and potential new customer conversion variability, as third-party data monitored by the firm indicates weakening in this area.
In other recent news, Shopify has been the focus of several key developments. KeyBanc Capital Markets raised its price target for Shopify to $145, maintaining an Overweight rating, due to expected stronger-than-anticipated quarterly results. This optimism is driven by stable macroeconomic conditions, product innovation, and international market progress. Meanwhile, Citizens JMP reiterated its Market Outperform rating with a $135 price target, highlighting Shopify’s improved product discoverability. UBS maintained a Neutral rating with a $110 price target, noting Shopify’s expansion into enterprise, international, and in-store point-of-sale markets. Additionally, Shopify’s ecosystem continues to grow, integrating payments, fulfillment services, and AI-driven tools, capturing demand from businesses moving online. A new partnership with WEBUY GLOBAL aims to integrate WEBUY’s group-buying platform with Shopify’s merchant network, potentially expanding WEBUY’s reach significantly. These recent developments underscore Shopify’s evolving strategy and market presence.
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