Shopify Stock Gets A Wave Of Price Target Hikes Post Q4 Results, But Shares Waver: Retail Stays Extremely Bullish

Shopify Inc. (SHOP) stock was in the spotlight on Wednesday as brokerages raised their price targets after the e-commerce giant’s fourth-quarter (Q4) performance beat Wall Street expectations.

Shopify shares fell over 1% during Wednesday’s mid-day trade.

According to TheFly, analysts from Morgan Stanley, JPMorgan, UBS, Oppenheimer, and other brokerages raised their price targets for the Shopify stock, noting that the e-commerce company posted a solid beat on the back of a “broad set of growth drivers.”

Shopify posted earnings per share (EPS) of $0.44, beating a consensus estimate of $0.43. The company’s revenue was $2.8 billion, easily beating estimates of $2.73 billion.

The company underscored that more than 875 million users bought a product from a Shopify merchant store during the quarter—nearly one in six internet users. 

It also revealed that it had crossed the $1 trillion cumulative gross merchandise value (GMV) processed through Shopify.

Shopify cautioned that the first quarter (Q1) is usually its “lowest GMV quarter” – it noted that this will have an impact on its revenue and by extension, its free cash flow (FCF) margins.

Despite this, the firm expects its FCF margin to rise to “mid-teens”, up from 12% during the same period last year. This remark garnered the attention of analysts.

In its latest note, Morgan Stanley underscored that Shopify accounts for less than 1% of global retail, and coupled with more room for leverage, it remains the brokerage’s “favorite FCF revision stories.”

The brokerage hiked its price target for the Shopify stock to $144 from $126, implying an upside of 18% from current levels.

Analysts at Wells Fargo think despite Shopify’s conservative outlook for the first quarter, investors will like the “impressive qualitative updates” and that its fourth-quarter strength will satisfy bulls.

The brokerage has a new price target of $135 for the company, up from $120. This implies an upside of nearly 10% from current levels.

Data from FinChat shows that the consensus price target for Shopify stock is $121, which is the same level at which the company’s shares are currently trading.

On Stocktwits, retail sentiment around the Shopify stock was in the ‘extremely bullish’ (91/100) territory despite Wednesday’s decline. Message volume was at ‘extremely high’ levels.

SHOP sentiment and message volume February 12, 2025, as of 12:30 pm ET | Source: Stocktwits

One user thinks the Shopify stock will trade at more than $200 in the near term.

Shopify’s share price has surged by nearly 78% over the past six months, but its one-year returns are slightly less impressive at 36%.

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