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There’s still a little upside left in Shopify, says Industrial Alliance

May 26, 2015.

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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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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