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On Wednesday, Cantor Fitzgerald analysts reaffirmed their Neutral rating on Shopify stock (NASDAQ: NASDAQ:SHOP), maintaining a price target of $91.00, below the current trading price of $105.11. According to InvestingPro data, 24 analysts have recently revised their earnings expectations downward, with price targets ranging from $85 to $135. The analysts cited several challenges that Shopify is facing this year.
Shopify’s gross merchandise volumes (GMs) are under pressure due to various factors. Despite these challenges, the company maintains a gross profit margin of nearly 50% and has achieved revenue growth of 26.5% over the last twelve months. The compression in subscription gross margins is partly attributed to increased hosting costs and a reduction in subscription revenues from new gross additions under the revised free trial period.
The analysts also highlighted PayPal-related challenges. Despite PayPal (NASDAQ:PYPL)’s small contribution to Shopify’s gross profit, there is a loss of non-cash revenue streams and a shift in the product mix towards payments.
Cantor Fitzgerald’s outlook reflects these ongoing headwinds, which are impacting Shopify’s financial performance. The firm’s analysts continue to monitor these developments closely.
Shopify’s stock remains under scrutiny as the company navigates these challenges in the current market environment.
In other recent news, Shopify has unveiled its Summer ’25 Edition, which includes over 150 upgrades designed to enhance the merchant experience. These new features aim to simplify the process of creating and customizing online stores, with the introduction of AI tools such as the AI Store Builder and Horizon theme foundation. The company has also made significant enhancements to its Point of Sale app and Shop app, improving functionality and global reach. In financial developments, Shopify’s first-quarter performance exceeded expectations, prompting DA Davidson to maintain a Buy rating with a $115 price target, citing robust growth in Europe and payment processing. Similarly, Benchmark analysts reiterated a Buy rating with a $125 target, highlighting Shopify’s 24.8% year-over-year growth in Gross Merchandise Volume and increased market share in e-commerce. On the other hand, Stifel analysts reduced their price target from $120 to $100, maintaining a Hold rating due to concerns about gross margin pressures and trade impacts. Meanwhile, Cantor Fitzgerald raised its price target to $91, keeping a Neutral rating, based on consistent GMV and Gross Profit figures. These analyst perspectives reflect varying levels of optimism about Shopify’s growth trajectory amid economic challenges.
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