Shopify's (NYSE:SHOP) sales will soar over 300% to $10 billion by 2025.
So says Jefferies analyst Samad Samana. On Thursday, Samana raised his rating on Shopify's stock from hold to buy. He also boosted his price forecast from $1,150 to $1,250, representing potential gains to investors of roughly 26% from the stock's current price near $988.
Samana sees the e-commerce leader enjoying "robust growth" in the coming years, as the migration of retail sales to online channels accelerates. He expects Shopify to deliver excellent results in its upcoming fourth quarter, driven by a strong holiday selling season. Additionally, he believes that over time, Shopify can generate larger fees on its gross merchandise volume -- essentially, the total amount of sales that merchants make on its platform.
Samana's comments echo those of Shopify president Harley Finkelstein, who recently said the pandemic has accelerated the shift to digital retail by nearly a decade. Shopify, in turn, is gearing up for a blockbuster holiday shopping season.
Retail e-commerce sales during the Cyber Five promotional period, which begins on Thanksgiving Day and runs through Cyber Monday, are projected to surge by nearly 40% to more than $39 billion in the U.S. alone, according to eMarketer.
And that might be conservative. Verizon recently reported that online traffic to 20 of the top U.S. retailers soared 82% year over year during the first week of November.
These online shopping trends should continue to fuel Shopify's growth. Moreover, with new fulfillment and financial services helping Shopify provide even more value to its merchant customers (and, by extension, generate larger fees on their rapidly growing sales), it's possible that Samana's $10 billion revenue forecast in 2025 could also prove conservative.