Shopify Impresses Most Analysts With Black Friday Sales

Baird analyst Colin Sebastian reiterated Outperform on Shopify Inc SHOP with a $50 price target. Sebastian tracked sales volumes on Shopify's platform over the holiday weekend through Cyber Monday as part of his annual "Turkey Five" e-commerce updates. 

Along with a stronger-than-expected weekend for e-commerce, he estimated mid-teens GMV growth for the Shopify platform through Sunday, which may suggest a potential upside to his Q4 GMV estimate. 

RBC Capital analyst Paul Treiber had an Outperform rating with a $55 price target. Treibersaid Shopify's Black Friday sales are up 17% Y/Y, well ahead of Q4 consensus GMV estimates, which call for Q4 GMV up 9% Y/Y. 

While Black Friday sales growth is above Q4 consensus GMV growth, Shopify's GMV has become less dependent on Black Friday than in the past, given the company's increasing mix of international sales. This year's Black Friday sales equate to 5.7% of Q4 consensus GMV.

Benchmark analyst Mark Zgutowicz had a Hold rating. BF sales represent 5.7% of 4QE consensus GMV, roughly in line with the 20-'21 respective average of 5.6%, implying a loosely in-line 4Q on BF sales alone. 

He awaited Shopify's Cyber Monday (CF) merchant sales (expected November 29 ) to provide more confidence in this prediction. With Shopify (and its merchants) strapped with escalating customer acquisition costs coupled with only moderate BF AOV growth relative to recent +8% CPI, it suggests decelerating GMV growth entering '23E. Zgutowicz '23E GMV growth of +3% Y/Y compares to the consensus +14% Y/Y.

Raymond James analyst Brian Peterson found the 17% reported growth would mark a notable improvement from recent GMV growth trends in the low double digits while also topping other e-commerce growth data points in the low single digits. 

He also found that the growth figure is well above the consensus GMV that only calls for 8% growth y/y in 4Q22 while also topping his estimate of 12% growth. While Black Friday sales represented about 5% of GMV in 4Q21, early data suggest he could be in for a GMV beat heading into 2023.

Price Action: SHOP shares traded higher by 2.57% at $37.74 on the last check Monday.