Last night, US stocks, $Shopify (SHOP.US)$ surged over 21%, marking the best single-day increase for the stock in nearly a year, with a cumulative increase of nearly 40% this year.

Specifically, Shopify's third-quarter revenue reached 2.16 billion USD, a 26% year-on-year increase, marking the sixth consecutive quarter of revenue growth exceeding 25%; the gross merchandise volume (GMV) was 69.7 billion USD, up 24% year-on-year, both surpassing analysts' average expectations. Additionally, Shopify performed excellently in international markets, with e-commerce gross merchandise volume in Europe increasing by 35%, particularly strong performances noted in the United Kingdom, Germany, France, and the Netherlands.

At the same time, Shopify's fourth-quarter guidance remains strong, with company management expecting fourth-quarter revenue to be between 25-29%, exceeding Wall Street's expectation of 22.8%. If expectations are met, this would mark an impressive record of Shopify achieving revenue growth exceeding 25% for seven consecutive quarters.

Once collectively watched with skepticism by Wall Street, Shopify has been rising against the trend.

Benefiting from the online shopping boom driven by the COVID-19 pandemic, Shopify's stock initially soared due to a surge in online spending, but then experienced a deep correction in 2022, plummeting nearly 75% over the year.

During the continuous decline of stock prices, in 2022, multiple Wall Street institutions were bearish on Shopify's future performance and stock price trends, generally exhibiting extremely pessimistic expectations: "Faced with fierce competition in the global e-commerce sector, especially from large platforms like amazon and high competitive pressure from chinese e-commerce platforms like alibaba, Shopify is struggling to survive."

Two years later, Shopify's stock price has soared, having rebounded more than 360% since the low in October 2022. These institutions have undoubtedly been 'slapped in the face' by the strong performance and stock price displayed by Shopify amid the assault from formidable competitors.

According to institutional estimates, in the GMV rankings of global mainstream e-commerce platforms for the first half of 2024, Shopify firmly holds second place with a significant advantage, only behind amazon, and well ahead of platforms like Shopee, ebay, and TEMU.

Analysts have raised the target price.

In light of optimistic expectations for economic recovery and consumer spending during the holidays, Wall Street institutions such as goldman sachs have raised their target price for Shopify.

Goldman sachs raised its target price for Shopify to 135 USD after the company released its financial report, indicating that there is still a 24% upside potential from the current latest price. The report pointed out that under the backdrop of overall resilient consumer spending, the number of large retailers and companies contracting services is continuously increasing, and the uptrend in stock prices remains strong. The total volume of Shopify's commodities and the multiple of e-commerce GMV are also maintained above three times, reflecting the ongoing revenue growth in the usa e-commerce market.

CFRA analysts reiterated a 'buy' rating on Shopify stocks and raised their target price to 135 USD, stating that their third-quarter performance guidance indicates that even under the macro pressures of slowing consumer demand, Shopify's growth continues to accelerate. They noted that the company has enhanced the momentum of business growth by expanding products, increasing new merchants, and scaling existing merchants.

Jefferies analysts indicated that the outlook for the fourth quarter is 'impressive,' expecting revenue to accelerate, and the GAAP operating expenses as a percentage of revenue will decrease significantly. The third-quarter report suggests that Shopify can 'continue to effectively scale its business and achieve profitability.'

In the short term, there is a continuous stream of bullish news regarding Shopify. According to Bloomberg, Shopify has recently followed the renowned Silicon Valley investor Peter Thiel in investing in a fintech company, and Peter Thiel firmly supports the Trump camp and is a close friend of the next vice president of the USA, JD Vance.

Analysts have stated that, given Peter Thiel's future importance in the Trump administration, he will have influence over policies and regulations in the technology sector. Collaborating with Thiel and his venture capital firm may provide Shopify with a certain level of support and assistance in future communications regarding international policies with the USA.

In the long run, the e-commerce development prospects are positive in most regions globally, and Shopify still has a significant room for improvement in penetration rates in the USA and Europe, with its growth momentum expected to gradually strengthen.

Editor/rice