Goldman Sachs Starts Shopify (SHOP) at Buy

Goldman Sachs analyst Gabriela Borges initiates coverage on Shopify (NYSE: SHOP) with a Buy rating and a price target of $1,570.00.

The analyst comments "We initiate on Shopify with a Neutral rating and a 12-month price target of $1,570 (7% upside). We see Shopify as well positioned for the long term based on our investing framework, given one of the largest TAMs in growth software at $200 bn and several avenues for platform expansion. However, our long-term positive view is balanced by near-term dynamics: 1) We believe it will be 2-3 quarters before GMV growth re-accelerates, in the context of a normalization in demand post a pull-forward in ecommerce penetration during 2020/2021. 2) We expect EBIT margins to trend down in 2022 as Shopify invests in strategic initiatives to reinforce its platform at scale. While we view initiatives such as fulfillment as solving a critical pain point at customers, they will likely require continued elevated investment. We believe the stock will likely be range bound in a period where growth is decelerating and EBIT margin is trending lower."

For an analyst ratings summary and ratings history on Shopify click here. For more ratings news on Shopify click here.

Shares of Shopify closed at $1461.58 yesterday.

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