While there aren’t exactly a lot of purely Canadian retailers out there, commerce platform Shopify (TSE:SHOP) (NYSE:SHOP) might be the most representative of Canadian retail thanks to its incredible reach and the sheer number of operations turning to the platform to run online business. That’s why it’s odd to see Shopify down fractionally in Friday afternoon’s trading as new reports emerged about Canada’s retail sector.
The news offered up by Statistics Canada wasn’t great, but it was far from terrible. Retail sales overall slipped by 0.3% in January, though that’s down following a 0.9% jump in sales from December, which makes perfect sense. Analysts were expecting a drop of 0.4% in January, so it’s a little better than expected.
Meanwhile, February sales actually look to improve, though just barely, at 0.1%. Basically, as CIBC senior economist Andrew Grantham pointed out, consumer spending is still struggling, but it’s hardly a disaster yet.
Gathering Recommendations
Here’s where things get a bit interesting; outside perspective on Shopify is also looking pretty good. Notorious analyst Jim Cramer notes that Shopify “…does an absolutely terrific job” and encourages investors to “…stick by it.” That alone might be a bit suspect—Cramer has been wrong enough before that an entire ETF was built around doing the opposite of what he recommended—but he’s not alone here.
Other reports suggest that Shopify “…is too cheap for what’s coming,” referring to a “…high-quality revenue base, low churn, and pricing power…” that ultimately “…contribute to its potential outperformance.”
What Is the Prediction for Shopify Stock?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SHOP stock based on 12 Buys, 14 Holds, and three Sells assigned in the past three months, as indicated by the graphic below. After a 70.95% rally in its share price over the past year, the average SHOP price target of C$111.75 per share implies 3.79% upside potential.
