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Investing.com - Mizuho (NYSE:MFG) maintained its Neutral rating on Shopify (NASDAQ:SHOP) but significantly raised its price target to $150.00 from $85.00 following the company’s strong second-quarter performance. The stock, currently trading at $154.90, has delivered an impressive 142% return over the past year, according to InvestingPro data.
The e-commerce platform reported a 31% year-over-year increase in Gross Merchandise Volume (GMV), substantially exceeding consensus expectations of 21% growth. Revenue also grew 31% compared to the same period last year, outpacing analyst projections of 25%. The company maintains strong financial health with a GREAT rating from InvestingPro, supported by a healthy current ratio of 3.71x.
Shopify experienced broad-based strength with acceleration in North America and international markets, showing no negative impacts from macroeconomic conditions or tariffs while benefiting from a 1-2 percentage point boost from favorable foreign exchange rates.
The company guided third-quarter revenue to grow in the mid- to high-20% range year-over-year, surpassing consensus estimates of 22% growth, with management noting that the strong performance has continued through early August.
Despite the impressive top-line results, Mizuho maintained its Neutral stance, citing ongoing pressure on gross margins and limited free cash flow margin upside in the near to medium term as Shopify continues to reinvest in its business. Trading at a P/E ratio of 71.1x, InvestingPro analysis suggests the stock is currently overvalued, with 20+ additional insights available to subscribers.
In other recent news, Shopify’s second-quarter results showed accelerating growth, with gross merchandise volume (GMV) excluding foreign exchange effects increasing by 29% year-over-year. This marks a four-point acceleration from the previous quarter, reflecting positive momentum in the company’s performance. Following these results, Citizens JMP raised its price target for Shopify to $185 from $135, maintaining a Market Outperform rating. Similarly, BofA Securities also increased its price target to $185 from $110, citing confidence in Shopify’s growth trajectory and market position. Benchmark raised its price target to $140 from $125, attributing the increase to a lower weighted average cost of capital and positive revisions to future estimates. Conversely, UBS maintained a Neutral rating with a $110 price target, noting Shopify’s expansion beyond its original market focus. Meanwhile, Wells Fargo (NYSE:WFC) removed Shopify from its Equity Strategy Signature Picks list, following a significant 78% gain since its addition and a transfer of analyst coverage. These developments highlight varying perspectives on Shopify’s future potential from different analyst firms.
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