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On Wednesday, KeyBanc Capital Markets adjusted its outlook on Shopify (NASDAQ:SHOP) shares, reducing the price target to $105 from $140, while maintaining an Overweight rating on the e-commerce company’s stock. Currently trading at $85.71, with a market capitalization of $111 billion, Shopify maintains a strong financial position, earning a "GREAT" overall health score according to InvestingPro analysis. The adjustment comes as KeyBanc analysts take a more cautious stance on annual revenue forecasts for Shopify, as well as for Global-e Online Ltd. (NASDAQ:GLBE) and BigCommerce Holdings, Inc. (NASDAQ:BIGC).
Justin Patterson, an analyst at KeyBanc, stated that the first quarter estimates for 2025 remain unchanged, but he anticipates that tariff headwinds will begin to affect results starting in the second quarter of 2025. Despite the lowered price target, Patterson reaffirmed an Overweight rating for Shopify, expressing confidence that both Shopify and Global-e Online will continue to capture market share and benefit from accelerated e-commerce penetration within their sector. The company has demonstrated strong performance with 25.78% revenue growth in the last twelve months, though InvestingPro data shows 18 analysts have recently revised their earnings expectations downward. For deeper insights into Shopify’s financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.
The new price target of $105 is based on a 10.3 times forward-year enterprise value to sales (EV/S) ratio for the fiscal year 2026. With current analyst targets ranging from $80 to $175 and a P/E ratio of 54.29, Shopify trades at premium multiples relative to its peers. Patterson highlighted that while the firm is optimistic about Shopify’s prospects, there are risks to their price target and estimates. These risks include factors specific to the company, such as competitive pressures, the ability to maintain favorable economic terms with third-party partners, marketing efficiency, platform reliability and security, investment needs, and broader macroeconomic and market conditions.
KeyBanc’s analysis suggests that these potential risks could prevent Shopify shares from achieving the projected price target and estimates. The firm’s outlook indicates a careful approach to valuation, taking into account the various challenges that could influence Shopify’s performance in the market.
In other recent news, Shopify is facing a revived data privacy lawsuit in the U.S., as the 9th U.S. Circuit Court of Appeals has allowed a class action to proceed. The case, brought by a California resident, alleges that Shopify installed tracking software on his phone without consent. Meanwhile, RBC Capital Markets has adjusted its outlook on Shopify, lowering the price target to $125 due to anticipated growth challenges from new tariffs and tax exemptions. Despite this, RBC maintains an Outperform rating on the company. Cantor Fitzgerald also reduced its price target to $80, citing expected revenue growth deceleration and slower subscriber additions. Loop Capital lowered its target to $120 but kept a Buy rating, highlighting Shopify’s strategic use of artificial intelligence to enhance operations. Additionally, JMP Securities has maintained a $135 price target, emphasizing Shopify’s focus on AI to boost product development and efficiency. These developments reflect a mix of legal, economic, and strategic factors influencing Shopify’s current landscape.
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