Truist Securities Increases Price Target for Shopify Shares Ahead of Earnings Report
In anticipation of Shopify’s upcoming fourth-quarter earnings report, Truist Securities has adjusted its price target for the company’s shares. The investment firm raised its target from $65.00 to $90.00, while maintaining a Hold rating on the stock. This revision comes after positive indicators from Shopify’s Cyber Week update and additional primary research.
Truist Securities, in partnership with their Data Science team, conducted research that suggests significant growth in Shopify’s fourth-quarter gross merchandise volume (GMV). Their data analysis indicates a potential 3% increase over the consensus GMV forecast for the company in the fourth quarter of 2023. If this estimate holds true, Shopify’s GMV for the quarter could reach $74.3 billion, surpassing both the consensus estimate of $72.1 billion and Truist’s previous estimate of $70.3 billion.
This anticipated GMV of $74.3 billion would mark a quarter-over-quarter growth of approximately 32% for the fourth quarter of 2023, slightly higher than the 29% growth reported in the same quarter of 2021. A strong finish to the quarter could result in increases in subscription and merchant solutions revenue, as well as non-GAAP operating profit. The raised price target of $90 reflects a higher valuation assumption for Shopify, driven by the company’s sustained business momentum.
InvestingPro Insights emphasize Shopify’s significant market capitalization of $116.71 billion USD, highlighting its strong market presence. Though the company has not been profitable over the last twelve months and has high price-to-earnings (P/E) ratios, investors have seen a high return over the past year. As of Q3 2023, Shopify’s revenue growth for the last twelve months stood at a robust 26.8%, indicating a healthy expansion in the company’s business operations.
InvestingPro Tips recognize Shopify as a prominent player in the IT Services industry and note its significant return over the last week. The company’s ample liquid assets and moderate level of debt suggest a strong foundation for potential future profitability. Analysts also predict that Shopify will turn profitable this year, a development that could boost investor confidence if realized.
Overall, Truist Securities’ increased price target for Shopify shares reflects the market’s positive outlook on the company’s performance. With strong growth potential in the fourth quarter and a solid foundation for profitability, Shopify continues to establish itself as a leader in the IT Services industry. Investors are eagerly awaiting the company’s forthcoming earnings report to assess its progress and potential for further success.
Analyst comment
Positive news: Truist Securities increases price target for Shopify shares ahead of earnings report
Market analysis: The increased price target reflects positive market sentiment and expectations of strong growth potential for Shopify in the upcoming quarter. The company’s solid foundation for profitability and significant presence in the IT Services industry position it as a leader and may boost investor confidence.
