Wedbush Raises Price Target on Shopify (SHOP); Expects Growth to Continue From Healthy Merchant Additions
Wedbush reiterated an Outperform rating on Shopify (NYSE: SHOP), and raised the price target to $27.00 (from $25.00), following the company's 4Q earnings report. Revenue of $70.2 million was much higher than consensus $61.2 million. The company guided for FY16 revenues of $320 $330 million, considerably higher than consensus $287 million. Wedbush expects growth to continue coming from healthy merchant additions and even higher GMV growth.
Analyst Gil Luria commented, "Revenue of $70.2 million (99% growth) was much higher than consensus $61.2 million and our $63.9 million estimate. Merchant Solutions grew 140% YoY to $35.6 million driven by increased Shopify Payments usage, and Subscription Solutions grew 70% YoY to $34.6 million due to a record number of net new merchant adds (almost double the previous record high). Non-GAAP EPS of ($0.01) beat consensus ($0.05) due to better than expected Non-GAAP operating margins of (1.9%) vs. consensus (7.1%)."
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Shares of Shopify closed at $22.37 yesterday.