On Tuesday, RBC Capital maintained its positive stance on Shopify Inc . (NYSE: NYSE:SHOP) shares, reiterating its Outperform rating and a price target of $130.00. The firm's analysis suggests that Shopify's Gross Merchandise Volume (GMV) for the fourth quarter is on track with market expectations, based on the performance during the Black Friday Cyber Monday (BFCM) period.
According to InvestingPro data, 26 analysts have revised their earnings upwards for the upcoming period, with the company's revenue growing at 23.47% over the last twelve months.
According to the firm, if the difference between Shopify’s BFCM sales growth and the total GMV growth for the fourth quarter remains similar to the previous year, the actual GMV for the quarter is likely to align with the consensus estimates. In the prior year, Shopify’s BFCM growth was reported at 24% year-over-year, slightly higher than the total Q4 GMV growth of 23% year-over-year by 76 basis points (bps).
Applying a similar differential to this year's figures, the analyst projects that Shopify's total Q4 GMV could exhibit a year-over-year increase of 23%, which is consistent with consensus expectations. The consensus forecast for Q4 GMV is an increase of 23% year-over-year to $92.7 billion, as per data compiled by Visible Alpha.
The firm's assessment also highlighted historical data, noting that over the last three years, sales made during the BFCM period have averaged 12.1% of Shopify's total Q4 GMV. This trend underpins the firm's current projections for the company's performance in the final quarter of the year.
RBC Capital's outlook indicates confidence in Shopify's ability to meet market expectations for the quarter, based on the analysis of the BFCM sales data and its correlation with the overall Q4 GMV growth trends.
InvestingPro subscribers can access over 20 additional insights about Shopify, including detailed financial health scores and comprehensive valuation metrics in the Pro Research Report, helping investors make more informed decisions about this rapidly growing tech company.
In other recent news, Shopify's Black Friday Cyber Monday (BFCM) sales growth accelerated to 24%, reaching $11.5 billion, a figure slightly below the anticipated 25% growth but in line with the consensus for the fourth quarter Gross Merchandise Volume (GMV).
This sales performance suggests a potential for the full-quarter GMV to hit approximately $92.9 billion, slightly above the Street's projection of $92.2 billion.
Analysts from Oppenheimer, Deutsche Bank (ETR:DBKGn), and Piper Sandler have been closely monitoring these developments. Oppenheimer maintained its Outperform rating on Shopify, while Deutsche Bank reaffirmed a Buy rating.
However, Piper Sandler maintained a Neutral rating, focusing on the impact of Shopify's partnership with PayPal (NASDAQ:PYPL), estimating a low single-digit impact on Shopify's growth due to this partnership, roughly 3% by their best estimate.
Moreover, Truist Securities, Loop Capital, and Scotiabank (TSX:BNS) all raised their price targets for Shopify, reflecting their recognition of the company's strong performance and potential for further growth. These are the recent developments for Shopify.
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