Shopify (SHOP) holds an 'untenable valuation' - Piper Sandler

November 28, 2023 8:31 AM EST
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Price: $70.00 -2.19%

Rating Summary:
    28 Buy, 22 Hold, 3 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 11 | Down: 11 | New: 26
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Shopify (NYSE: SHOP) shares were cut to Underweight from Neutral at Piper Sandler on Tuesday, with analyst Clarke Jeffries lowering the price target to $56 from $58 per share.

Jeffries said in a note that the firm decided to revisit its investment thesis on the stock as it again exceeds $70 per share.

"Shares have substantially outperformed this year; catalyzed by the exit of the logistics business & newfound emphasis on profitability," said Jeffries. "The company is clearly a commerce platform juggernaut with 2M+ merchants powering $200B+ of GMV while growing top line >20%."

However, he added that at present, SHOP shares hold an "untenable valuation" as growth and profit assumptions embedded in the shares today are "too aggressive."

"Macro, execution, or near-term demand are not catalysts for our rating change, but we believe fundamentals are set to moderate in 2024 as the company clears events unique to 2023," the analyst added.

By Sam Boughedda

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