As e-commerce platform Shopify (SHOP) prepares to release its Q4 earnings report in a few weeks, RBC Capital Markets weighed in with its expectations. Interestingly, five-star analyst Paul Treiber is expecting earnings to land above consensus estimates thanks to data from multiple third-party sources that suggest strong growth in gross merchandise volume and margins.
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Nevertheless, RBC remains cautious due to the potential for a soft Q1 outlook. In fact, the company’s Q1 outlook has historically been conservative due to seasonal factors. As a result, Shopfy’s NYSE-listed shares have fallen by an average of more than 15% the day after announcing Q4 results during the past three years.
Still, with that being said, RBC Capital Markets views Shopify as a compelling investment opportunity and believes that any potential pullback in the stock is a buying opportunity. Indeed, Treiber currently has a Buy rating with a $130 per share price target, which implies a 22.6% potential upside from current levels. In addition, this optimism seems to be shared by many analysts, with 27 of the last 29 Q4 EPS revisions for Shopify being upward.
Is SHOP Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SHOP stock based on 20 Buys, 13 Holds, and three Sells assigned in the past three months, as indicated by the graphic below. After a 31% rally in its share price over the past year, the average SHOP price target of $116.91 per share implies 10.4% upside potential.
