If you’ve been following online retail infrastructure specialist Shopify (TSE:SHOP) (NYSE:SHOP) lately, then you know it’s had a bit of a slump. Yet, for many investors, the notion of a slump is followed by the idea that, perhaps, it’s time to “buy the dip.” Indeed, there’s a growing body of evidence that suggests this is so among analysts, and Shopify shares gained fractionally in Tuesday morning’s trading as a result.
Multiple analysts came out in favor of a buy-the-dip strategy on Shopify, including Morgan Stanley, Citigroup SA, and BNP Paribas SA, all of whom upgraded their ratings to Buy in the last month. It’s worth noting that BNP Paribas SA’s analyst, Stefan Slowinski, currently enjoys a 100% success rate on Shopify stock with an average return of 10.57% per rating.
That by itself is a big step, but it only gets better from there; Huntington National Bank analyst David Klink notes that Shopify “…has a long-term place in the e-commerce world” and that the recent rundown has “…maybe…gone a little bit too far.” Recent projections of higher-than-expected operating costs haven’t done it any favors, but again, this may simply be overstated.
Shopify’s Secret Weapon
Does Shopify have a secret weapon lurking in the background? Well, no, not that we know of. But if it did, you might be spelling it “AI.” Some are looking at Shopify and believe that this online retailing facilitator could make a big impact in AI.
Morgan Stanley recently called Shopify a major AI winner over the long term because so many AI applications dovetail well with online shopping. And with Shopify able to land a first-mover—or close to it—advantage with any new AI tool thanks to the nature of its systems, that could make it a real powerhouse.
Is Shopify Stock a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on Shopify stock based on 12 Buys, 14 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 22.88% rally in its share price over the past year, the average SHOP price target of C$112.97 per share implies 6.43% upside potential.
