Shares of Shopify (NYSE:SHOP) gained 25.3% in June, according to data from S&P Global Market Intelligence. The e-commerce services stock posted another month of big gains thanks to a major new partnership and positive coverage from analysts.
Walmart announced on June 15 that it would feature select Shopify stores on its third-party online retail marketplace -- a development that could have big implications for the competitive landscape in the e-commerce space. Shopify's valuation saw significant gains following the news, and shares continued to climb as analysts raised their price targets on the stock.
Walmart is investing to build its online retail business, and bringing products from Shopify stores on to its e-commerce platform could help both companies challenge Amazon.com's dominance in the space. Walmart will feature products from select Shopify-powered businesses directly on its website. The retail giant expects that it will be selling goods from roughly 1,200 Shopify partners by the end of this year.
Getting featured on Walmart.com has the potential to be a big sales driver for businesses using Shopify, and the partnership has added to the value of the e-commerce services company's thriving platform. Analysts were generally very bullish on the development.
RBC Capital analyst Mark Mahaney published a note on June 18 reaffirming his "outperform" rating on Shopify and raising his one-year price target on the stock from $825 to $1,000 per share. Mahaney's target suggested roughly 20% upside on the stock at the time of the note's publication, and the company's share price quickly went on to reach the analyst's valuation estimate.
Shopify has continued to climb early in this month's trading, gaining 6.8% on July 1 and closing the day at $1,016.64 per share.
The e-commerce company stands as one of this year's best-performing large-cap stocks and is now valued at roughly 56 times this year's expected sales. That's a highly growth-dependent valuation, but the company still has plenty of room for expansion over the long term and looks poised to enjoy continued tailwinds from the increasing importance of online retail.