There’s a stock lurking in the tech sector that has a hard-to-beat upside potential of 55%. That’s the firm belief of one analyst who recently reiterated his enthusiastic buy recommendation on Shopify (NYSE: SHOP). Deutsche Bank‘s Bhavin Shah feels that the e-commerce facilitator is standing in front of numerous opportunities to expand business.
The analyst came away with quite a positive feeling about Shopify following its ShopTalk event last week. He published a new research note reiterating his buy recommendation on the stock, and his price target of $150 per share. In Shah’s view, the company has clear opportunities to provide merchants with unified commerce, personalization, and other features allowing them to sharpen their competitive edges.
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Moreover, artificial intelligence (AI) is in high demand with many industries, including e-commerce. Shah wrote in his Shopify note that by helping clients harness AI, the company will help them enhance the general shopper experience, and assist with customer retention.
Like Shah, I feel Shopify is undervalued, and I’d add that it’s generally under-appreciated by investors. It’s not a glamorous company since what it offers are the relatively unexciting solutions that underpin e-commerce operations.
To me, that makes it a solid pick-and-shovel play in the extremely long-tail online retailing space. There are countless businesses selling their wares this way, so a company that offers a range of services that can make them more competitive will always be an appealing proposition. I entirely share Shah’s bullish view of Shopify.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.
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