Square (SQ) and Shopify (SHOP) are enabling their merchant customers to be more competitive, says one analyst who hiked his price targets on both e-commerce companies.
X"Emerging brands on Shopify are getting larger, and more established brands are gravitating to Shopify to be more nimble," KeyBanc Capital Markets analyst Brett Andress said in a report to clients Tuesday. He raised Shopify's price target to 182 from 170.
Andress also hiked Square's price target to 70 from 55. The KeyBanc analyst is upbeat on Square Cash.
He expects Square to develop add-on revenue sources for Square Cash, a free person-to-person mobile app that is often used to send money to friends or family.
Square Cash More Than Peer-To-Peer
"The cash app was initially focused on (peer-to-peer) money transfer, yet is transforming into a full-fledged financial service offering with new loyalty features like Boost, direct deposit, and a physical Cash Card," Andress said.
The San Francisco-based firm makes credit-card readers that plug into mobile phones and tablets. Square also provides software for point-of-sale and back offices in order to manage inventory and other tasks. It also offers customer relationship management software so businesses can do targeted marketing to their clients.
Shopify sets up e-commerce websites for small businesses, and partners with others to handle digital payments and shipping.
Shopify fell 1.3% to close at 170.61 on the stock market today amid a broad tech sell-off tied to worries over a U.S.-China trade war. Square slipped 0.4% to 65.96.
From a year ago, Shopify has gained 94% as of Monday's market close. Square has shot up nearly 176% over the last 12 months.
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