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‘Crown Jewel’ For Amazon Partner Could Be Big Data Analytics


The crown jewel of e-commerce platform provider Shopify (SHOP) could be merchandise data from small and medium-size businesses that use its software, an analyst said Tuesday.

Monika Garg at Pacific Crest Securities also hiked her price target on the company to 78 from 66. Shopify stock lost 2.4% to 67.20 on the stock market today. Shares in Shopify are up 60% in 2017.

“Data could be a crown jewel,” Garg wrote in a note to clients. “Shopify hosts online stores for its merchants, hence Shopify knows about inventories, receivables, which products are getting sold and which are getting stalled. We believe this is a unique data set that Shopify is gathering on its merchants.

“And this data could be useful for any commercial bank or consumer finance company,” Garg went on to say. “Shopify had also indicated on its recent earnings call that the company is investing heavily in its machine learning and data capabilities.”

Shopify’s 2016 revenue jumped 90% to $389.3 million.

“Given its growth opportunities, we estimate that Shopify could do around $1.7 billion in revenue by 2021,” said Garg.

Canada-based Shopify provides a cloud-based e-commerce platform that businesses use to build websites and sell goods online and across multiple sales channels, including mobile and social media. Shopify says that more than 375,000 small and medium-size businesses use its software.

Shopify processed $15 billion in gross merchandise volume, or GMV, in 2016, nearly double from the previous year. GMV, an online retailing term, refers to total sales dollar value for merchandise sold through a particular marketplace.

Some analysts have viewed Shopify as a possible takeover target of Adobe Systems (ADBE).

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