BIGC - Shopify: Every Growth Picker's Dream Beset By Heady Valuations

• We initiate coverage on Shopify with a "Neutral" rating and a price target of $985 which is 7% below its current share price of $1,063.
• Shopify has a best-in-class track record of growth, recording revenue CAGR of 67% over 2015 - 2019.
• The platform benefits from secular growth in e-commerce, strong industry positioning, robust balance sheet and long runway of growth.
• However, significant risks remain, one of which involves successful vaccine rollout in 2021, meaning growth trajectory may be non-linear over the next 12 to 24 months as consumers increasingly go back to shop at brick-and-mortar businesses.
• Valuations remain rich with the stock trading at EV/Rev NTM of 32x, up from an average of 22x in the year preceding the pandemic.

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