Shopify Inc (TSX:SH., NYSE:SHOP) is on course to beat gross merchandise value estimates thanks to resilient consumer spending when it reports on November 12, Jefferies analysts have forecast.
Merchant numbers using Shopify should continue to grow through the third quarter, as traction from new channels also buoys figures, Jefferies added in a note.
Jefferies forecast gross merchandise values of $67.9 billion for the quarter, ahead of wider consensus estimates for $67.8 billion.
Total revenue was seen climbing by 24% year on year to $2.124 billion in the meantime, with operating margins climbing to 16% on a non-generally accepted accounting basis.
“Consumer spending has generally held up,” Jefferies pointed out, highlighting non-store retailer sales growth of 7% year on year in September.
An operating margin of 14.6% had beaten expectations in the last quarter, analysts said, leaving investors eyeing a path for the figure to exceed 20% ahead.
“Beyond margin expansion, we believe investors will be looking for positive color on new growth segments, signaling strong return on investment on incremental spending.”
A ‘hold’ rating was set, alongside an $80 share price target, broadly in line with Monday’s closing price.
“While we appreciate the durable topline growth and capacity for operating margin upside, we believe shares will likely remain range-bound given the premium valuation,” Jefferies said.