Canadian e-commerce giant Shopify (NYSE:SHOP)(TSE:SHOP) has teamed up with Amazon (NASDAQ:AMZN), giving its merchants access to Prime members. Through the move, Shopify continues to expand its sales and marketing channels, which should drive its merchant base.
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Shopify announced that Amazon is set to launch an application within Shopify’s app ecosystem. This app will empower merchants utilizing Amazon’s fulfillment network to incorporate “Buy with Prime” functionality into the checkout process on Shopify. Shopify’s merchants can now offer Prime members access to Prime benefits, including fast and free delivery outside of Amazon.com.
Shopify’s merchants who also partner with Amazon will now have access to Prime members and will easily offer Buy with Prime benefits to these customers on their Shopify-powered site. The initiative is part of Shopify’s efforts to help its merchants promote and sell their products on multiple sales channels, all from within the Shopify platform.
Although the move will likely drive Shopify’s merchant base, let’s look at what the Street recommends for its stock.
Is Shopify a Buy, Hold, Sell?
Shopify stock has gained nearly 73% year-to-date. Moreover, it increased about 4% after-hours following the news of the Amazon partnership.
On August 21, Wedbush analyst Scott Devitt initiated coverage on SHOP stock with a Buy recommendation and a price target of $62, implying an upside potential of 3.3% from current levels. The analyst sees Shopify as the “operating system for eCommerce outside of Amazon.” Furthermore, the analyst highlighted that the company’s decision to divest its logistics business puts it in a favorable position to produce improved margins.
While Shopify is poised to gain from digital transformation, positives appear to be priced in the stock. As Shopify stock has recovered significantly, its valuation looks rich, keeping analysts cautiously optimistic about the stock.
With 11 Buy and 16 Hold recommendations, SHOP stock has a Moderate Buy consensus rating on TipRanks. Analysts’ average price target of $68.02 implies 13.35% upside potential from the current level.
