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Shopify Price Target Hiked On Facebook, Amazon Synergies

Shopify, which made its IPO last year, is seen having good synergies with Facebook and Amazon.com. (AP)

There's upside for Shopify (SHOP) in integrating its software with Facebook's (FB) social media network and Amazon.com's (AMZN) e-commerce platform, says Pacific Crest Securities, which upped its price target on Shopify stock.

Monika Garg, the Pacific Crest analyst, hiked her price target to 52 from 43.

Shopify stock rose 1.6% in the stock market today, to 44.36, and has shot up 72% in 2016 and touched its record high of 45.20 on Sept. 22.

Merchants use Shopify's software to support sales channels over the web, mobile devices, social media and retail outlets. Shopify says more than 300,000 small and medium-sized businesses use its software.

"Facebook announced a new Marketplace feature earlier this week. Facebook Marketplace will have a dedicated "shop" tab for merchants on desktop and in-app for Android and iPhone smartphones," said Garg in her research report. "Shopify also announced a new capability enabling merchants to sell directly in Facebook Messenger. This tighter integration with Facebook makes it easier for Shopify's merchants to sell on Facebook."


IBD'S TAKE: IBD's Computer-Software Enterprise group is ranked No. 4 out of 197 industry groups. The group's Paycom Software and Aspen Technology belong to the IBD 50.


Shopify said over half merchant orders were made via mobile devices in the June quarter. It says its merchants will be able to accept Apple (AAPL) Pay purchases made on iPhones or iPads later this year.

Amazon.com is another potential partner, says Garg." We believe Shopify is developing capabilities to enable merchants to sell on marketplaces such as Amazon. The added capability could attract more new customers," she wrote.

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