Shopify(SHOP:NYE) RBC reiterates Outperform on e-commerce surge

STA Research
by: STA Research

RBC Capital’s analyst Mark Mahaney today confirmed his Outperform rating on Shopify.   Maheny also kept his $1,250 target on the stock.  E-commerce sales have jumped 44 percent since the pandemic struck back in March.  Shopify is a major beneficiary of this rapid  transfer to online purchases by consumers as they try and mitigate the fallout from COVID-19 by changing their buying channels.  This rotation is what makes the analyst bullish about the company’s future financial forecast and valuation metrics.

STA Research(stocktargetadvisor) has a average target of $885 on the stock, and a consensus Buy rating. STA’s view of the stock is Neutral with a score of 5 out of 10, where 0 is very bearish and 10 very bullish.

 
What to like:
High market capitalization
This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.
Positive cash flow
The company had positive total cash flow in the most recent four quarters.
Superior Revenue Growth
This stock has shown top quartile revenue growth in the previous 5 years compared to its sector.

 
What to not like:
Overpriced compared to book value
The stock is trading high compared to its peers median on a price to book value basis.
Overpriced on cashflow basis
The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.
Low Earnings Growth
This stock has shown below median earnings growth in the previous 5 years compared to its sector

 

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