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On Friday, Benchmark analysts maintained their positive stance on Shopify (NASDAQ: NASDAQ:SHOP) shares, reiterating a Buy rating and a $125.00 price target. According to InvestingPro data, analyst targets currently range from $80 to $151, with the stock receiving a strong consensus recommendation of 1.86 (Buy). The analysts’ outlook is based on Shopify’s robust first-quarter Gross Merchandise Volume (GMV) growth of 24.8% year-over-year on a constant currency basis, and the company’s second-quarter earnings revenue guidance projecting approximately 25% year-over-year growth. This aligns with the company’s impressive revenue growth of 26.5% over the last twelve months, as reported by InvestingPro, which offers comprehensive analysis through its Pro Research Report covering 1,400+ top US stocks.
Shopify’s recent performance has been particularly notable given the unpredictable macroeconomic environment and consumer spending patterns. With a market capitalization of $118.8 billion and an impressive 50.5% return over the past year, the company has demonstrated strong momentum. Benchmark highlighted Shopify’s increasing market share within the global e-commerce space as a key factor in its success. According to estimates, Shopify has gained approximately 200 basis points of U.S. e-commerce market share year-over-year in the first quarter, compared to around 100 basis points in the same period the previous year.
The analysts believe that Shopify’s continued enterprise growth over the past quarters is becoming a significant contributor to its overall growth. They anticipate that Shopify management might soon provide quantifiable insights into this growth increment. Despite the varied quarterly share gains, the strength observed in specific verticals such as apparel and accessories, as well as health and beauty, has been a positive sign.
While management has observed strengths across various sectors, Benchmark’s conservative estimate for Shopify’s second-quarter GMV growth stands at 21.3% year-over-year, amounting to $81.55 billion. This reflects a slight deceleration of 100 basis points on a two-year stack basis. Nonetheless, the firm’s reiteration of the Buy rating and price target suggests confidence in Shopify’s ability to navigate through the current market conditions and continue its growth trajectory. InvestingPro analysis shows the company maintains a "GREAT" Financial Health Score of 3.14, with strong cash flow metrics and moderate debt levels, though it currently trades at a high P/E ratio of 73.
In other recent news, Shopify’s financial results and analyst assessments have drawn significant attention. Shopify’s first-quarter performance exceeded some expectations, with Gross Merchandise Volume (GMV) growing by 23% year-over-year, marking the seventh consecutive quarter of over 20% growth. However, this did not prevent several analysts from adjusting their price targets. Stifel reduced its target to $100, maintaining a Hold rating, while Cantor Fitzgerald raised its target to $91, also keeping a Neutral rating. Truist Securities made two separate adjustments, first lowering the target to $95 and then to $100, both times maintaining a Hold rating. Benchmark also cut its price target to $125 but continued to recommend a Buy rating. Analysts have cited concerns over macroeconomic uncertainties and tariffs, which could impact Shopify’s merchants and consumer spending. Despite these concerns, analysts such as those from Truist and Benchmark express cautious optimism about Shopify’s resilience and growth potential, highlighting its ability to navigate global market challenges.
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