Shopify (SHOP) has room for upside - Oppenheimer

Shopify (NYSE: SHOP) has room for potential upside to consensus estimates for FY23 and FY24, according to Oppenheimer analyst Ken Wong.

He told investors in a note that when the firm incorporates all historical cohorts into its forecast, "total revenue growth in FY23 and FY24 would be projected well above consensus estimates (FY23/24 +27% / +25% vs. Street +19% / +21%)."

"Under the 'new normal' scenario, historical customer cohort growth is boosted by FY20-FY21 with some drag from FY22," explained the analyst, who has an Outperform rating and a $65 price target on the stock. "We assume merchant adds moderate from FY22 levels but remain above pre-pandemic levels."

Wong pointed to better macro and broader new product adoption — which is a focus this year — as a driver of significant upside.

"We assume net adds are consistent with FY22 levels and cohort behavior blends FY20-like peaks with historical averages," he added. "On this basis, revenue would trend towards ~$7.74B (FY23) and $10.54B (FY24), meaningfully above consensus ($6.65B and $8.08B)."

By Sam Boughedda

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