Shopify: Strong Growth Potential Ahead

Shopify is a strong e-commerce stock that has more than doubled in value since the start of the year. The demand and reach of Shopify’s platform is set to keep increasing because consumers worldwide are starting to prefer to buy and sell online. Shopify’s platform, which helps small business owners easily create online stores and sell their products, is also ideal in the midst of the coronavirus pandemic when consumers are limiting their movement.

No competitor?

In the second quarter of 2020, Shopify’s gross merchandise value jumped by a whopping 119% year over year to reach its highest mark ever at $30 billion,. Another key factor that makes Shopify a strong player in the ecommerce market is lack of competitors. BigCommerce, the closest competitor of Shopify, made only $137 million in annual recurring revenue, or ARR, which Shopify’s ARR came in at $665 million. Shopify has a far wider reach, customers and platform dominance than BigCommerce or any other platform of its kind.

Analysts Bullish on Shopify’s Future

Currently, according to The Wall Street Journal, only 2 analysts have a sell rating on Shopify, while 11 have a buy rating and 17 have an overweight rating. Last month, Goldman Sachs’ analyst Christopher Merwin upgraded Shopify from neutral to buy and maintained a $1,127 price target. The analyst said that after the coronavirus-related lockdowns, ecommerce spending now accounts for over 40% of the total retail spending. The analyst thinks that Shopify has a significant opportunity to grab a solid share of the rising ecommerce market.