Roth Capital analysts have upgraded Shopify’s stock rating to buy
2023.01.30 09:31
Roth Capital analysts have upgraded Shopify’s stock rating to buy
By Tiffany Smith
Budrigannews.com – (NYSE:) Shopify based on more favorable comparisons and the e-commerce company’s recent pricing tier changes, was raised to Buy from Neutral on Monday with a $56 price target from Roth Capital Partners.
Last week, Shopify announced that its Basic plan will now cost $39 per month instead of $29, that its Shopify plan will cost $105 instead of $79, and that its Advanced plan will cost $399 instead of $299.
Analysts at Roth Capital stated:
“At the beginning of 2023, we believe that the Company is out of the last tough Covid comps. Second, even though the company’s revenue is estimated to have more than tripled in just three years, we still expect it to grow 18% y/y in 2023 (on a much larger base), and we believe that with the new pricing tiers it announced last week, it could grow even more than 20%.”
Additionally, the analysts assert that the announcement of Shopify’s new pricing tiers may provide a double advantage.
Analysts provided the following explanation:
“Annual plans are about on par with legacy pricing, despite average new monthly prices appearing to be approximately 33% higher.”
While we anticipate some revenue growth from this new pricing structure in the second half of the year, we believe the more significant benefit will come from a larger percentage of SHOP’s merchants switching to annual membership, which should improve revenue visibility and reduce merchant churn.”
They conclude the note by stating that the company believes that SHOP’s market-leading position in e-commerce software warrants a premium.
