E-commerce platform Shopify (SHOP) joined the $1,000 per share club last week, symbolically reaching the landmark on Canada Day. The Ottawa-based company has delivered a strong performance in 2020, with shares up by a remarkable 159% year-to-date. Given this impressive rally, should investors reduce exposure to the e-commerce highflyer?
No, is the succinct answer from Baird analyst Colin Sebastian.
While the lofty valuation is “still the biggest investor pushback,” the 5-star analyst believes there still remains a large untapped TAM (total addressable market) that Shopify has yet to penetrate.
Sebastian said, “Shopify has made our list of favorite stocks each year since initiating coverage in early 2016. In our view, there are scarce few (if any) public software companies as closely tied to the enormous e-commerce share shift, with an established leadership position, and world-class product and engineering. Moreover, we see multiple incremental revenue drivers ahead from new