Shopify is still kicking butt, this analyst says

RBC Dominion Securities analyst Paul Treiber raised his target on Shopify (Shopify Stock Quote, Chart, News, Analysts, Financials NYSE:SHOP) to US$200 from $180.00, citing strong e-commerce growth, market share gains and the company’s potential to benefit from AI.

Treiber maintained his “Outperform” rating, arguing that recent third-party data suggest Shopify could exceed consensus expectations for Q3 results and Q4 guidance.

“We expect Shopify’s valuation to continue re-rating higher on sustained strong growth and growing recognition as an AI winner,” Treiber said.

The analyst speculated that Shopify’s recent price increase could add approximately 110 basis points to annualized revenue growth.

U.S. Census data showed e-commerce sales rose 8.2% year-over-year in August and September, accelerating from 7.4% in April and May.

Applying Shopify’s previous growth premium to broader U.S. e-commerce trends, Treiber estimates Q3 gross merchandise value (GMV) increased 32.3% year-over-year to $121.8-billion.

That compares with consensus expectations of $119.9-billion, representing 30.3% growth, and RBC’s forecast of $120.5-billion, or 31.0% growth.

Treiber said merchant growth and market share gains also support his positive outlook.

Store Leads data showed Shopify’s merchant count increased 15% year-over-year in Q3, accelerating from 11% in Q2.

Shopify Plus merchant growth reached 24%, up from 21% in Q2 and its strongest pace since Q4 2021.

Treiber said Shopify continues to take share from competitors, with merchant counts at key rivals declining 14% year-over-year.

Recent enterprise customer wins for the Canadian juggernaut include Dior, Clinique, MAC Cosmetics and CORSAIR.

RBC’s proprietary data also showed monthly active users of the Shop App increased 39% year-over-year, while unique visitors to Shopify’s merchant administration platform rose 41%.

Treiber believes the combination of accelerating merchant adoption, stronger e-commerce spending and additional revenue from pricing supports his expectation that Shopify’s growth momentum will continue.

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