Ahead of Shopify’s (Shopify Stock Quote, Chart, News: TSX, NYSE:SHOP) second quarter results, Industrial Alliance Securities analyst Blair Abernethy thinks there’s still a little upside left in the stellar performer.
On Tuesday, August 1, Shopify will report its Q2, 2017 results. Abernethy thinks the company will lose $0.08 a share and generate EBITDA of negative $1.9-million on a topline of $144.1-million. His expectations are in-line with the street consensus of a $0.07 loss and EBITDA of negative $2.7-million on revenue of $143.9-million.
Abernethy say Shopify deserves a premium valuation.
“We compare Shopify to other high growth SaaS/e-commerce companies, which are trading in the 7-9x EV/Sales range, while most are growing at a much slower pace than Shopify,” the analyst says, adding that there are still a number of unresolved developments that could provide additional upside.
“We see several potential catalysts for the stock, including new major platform partnerships, Shopify Plus traction with large companies, further take-up of the Shopify Capital offering, and tuck-in technology acquisitions,” Abernethy says.
In a research report to clients today, Abernethy maintained his “Buy” rating and one-year price target of (U.S.) $100.00 on Shopify, implying a return of 7.3 per cent at the time of publication, including dividend.
Abernethy thinks Shopify will post Adjusted EBITDA of $6.9-million on revenue of $629.1-million in fiscal 2017. He expects those numbers will improve to EBITDA of $38.2-million on a topline of $871.1-million the following year.
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