Shopify (SHOP) Stock: $1,700 Price Target From Susquehanna

By Amit Chowdhry ● Nov 13, 2021
  • The shares of Shopify Inc (NYSE: SHOP) have received a price target of $1,700 from Susquehanna. These are the details.

The shares of Shopify Inc (NYSE: SHOP) have received a price target of $1,700 from Susquehanna. And Susquehanna analyst John Coffey reduced the price target from $1,800 while maintaining a “Positive” rating on the company shares.

Coffey likes the setup through 2023 as the company is focusing on new markets and strategies to further monetize existing customers. And Coffey believes that the e-commerce surge from the pandemic seems to be over.

Shopify reported its Q3 financial highlights late last month. These are the highlights:

— Total revenue in the third quarter was $1,123.7 million, up 46% year over year.

— Subscription Solutions revenue was $336.2 million, up 37% year over year, primarily due to more merchants joining the platform.

— Merchant Solutions revenue was $787.5 million, up 51% year over year, driven primarily by the growth of Gross Merchandise Volume (GMV).

— Monthly Recurring Revenue (MRR) as of September 30, 2021 was $98.8 million. And MRR increased 33% year over year, up from $74.4 million as of September 30, 2020 as more merchants joined the platform and the number of retail locations using POS Pro increased. Shopify Plus contributed $27.2 million, or 28%, of MRR compared with 25% of MRR as of September 30, 2020.

— GMV for the third quarter was $41.8 billion, an increase of $10.8 billion or 35% over the third quarter of 2020. Gross Payments Volume (GPV) grew to $20.5 billion, which accounted for 49% of GMV processed in the quarter, versus $14.0 billion, or 45%, for the third quarter of 2020.

— Gross profit dollars grew 50% to $608.9 million in the third quarter of 2021, compared with $405.1 million for the third quarter of 2020.

— Adjusted gross profit4 dollars grew 49% to $616.4 million in the third quarter of 2021, compared with $412.6 million for the third quarter of 2020.

— Operating loss for the third quarter of 2021 was $4.1 million, or 0.4% of revenue, versus income of $50.6 million, or 7% of revenue, for the comparable period a year ago.

— Adjusted operating income for the third quarter of 2021 was $140.2 million, or 12% of revenue, compared with an adjusted operating income of $130.9 million or 17% of revenue in the third quarter of 2020. The adjusted operating income excludes a $30.1 million impairment relating to the planned termination or sublet of additional lease agreements for office space that they ceased using in the third quarter of 2021, resulting from the decision to work remotely permanently, which they announced in the second quarter of 2020.

— Net income for the third quarter of 2021 was $1,148.4 million, or $9.00 per diluted share, compared with net income of $191.1 million, or $1.54 per diluted share, for the third quarter of 2020. Q3 2021 net income includes a $1,340.8 million unrealized gain on the equity investments.

— Adjusted net income for the third quarter of 2021 was $102.8 million, or $0.81 per diluted share, compared with adjusted net income of $140.8 million, or $1.13 per diluted share, for the third quarter of 2020.

— At September 30, 2021, Shopify had $7.52 billion in cash, cash equivalents, and marketable securities, compared with $6.39 billion on December 31, 2020.

Shopify saw its stock price increase 12.02% on Friday. Investors appear to be responding positively to Affirm reported that its active merchants increased from 6,500 to 102,000 and the substantial majority came from the adoption of Shop Pay Installments by merchants on Shopify’s platform.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.