Wall Street closes at a record for the first time since end of January
Investing.com - Wells Fargo lowered its price target on Shopify stock to $166 from $191 while maintaining an Overweight rating on the shares. The stock currently trades at $118.25, down 28% over the past six months, though it has delivered a 54% return over the past year.
The firm forecasts first-quarter 2026 results slightly ahead of consensus expectations, with gross merchandise volume and non-GAAP operating income projected 1% and 3% above Street estimates, respectively. Wells Fargo projects first-quarter GMV growth driven by an 11% year-over-year increase in merchants and 17% year-over-year ex-foreign exchange growth in average GMV per merchant.
The firm sees revenue year-over-year growth of 32%, 1% above Street expectations and versus guidance of low-thirties percent, implying a total take rate of 3.14%. Wells Fargo estimates non-GAAP operating income of $495 million, 3% above the $479 million Street consensus, implying margins of 15.8%, up 190 basis points year-over-year. The company’s recent momentum is reflected in its 30% revenue growth over the last twelve months, with 17 analysts revising earnings upwards for the upcoming period, according to InvestingPro data.
The firm projects free cash flow margins of 14.1%, in line with Street estimates. Wells Fargo noted it did not expect the emergence of agentic commerce to be quick and easy, acknowledging it may have been optimistic on the pace of adoption.
The firm said it remains convinced that agentic commerce will gain traction and Shopify (NASDAQ:SHOP) will be a prime beneficiary. For deeper insights into Shopify’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available for this and 1,400+ other US equities on InvestingPro.
In other recent news, Shopify reported fourth-quarter results that exceeded analyst expectations. The company’s gross merchandise volume (GMV) and pro forma operating income surpassed Street estimates by 2% and 7%, respectively, with GMV seeing a 31% year-over-year increase, fueled by strong holiday shopping trends. Despite these strong results, Cantor Fitzgerald lowered its price target for Shopify to $126 from $181, citing valuation concerns while maintaining a Neutral rating. Deutsche Bank also adjusted its price target for Shopify, reducing it to $175 from $195 due to changes in profitability estimates related to tax rates, though the firm maintained a Buy rating.
Piper Sandler reiterated an Overweight rating on Shopify, setting a price target of $165 based on the company’s projected revenue growth potential through 2027. The firm anticipates a 29% year-over-year revenue growth in 2027, which is above the Street consensus of 24%. Citizens maintained its Market Outperform rating and a $160 price target, highlighting Shopify’s positive perception among eCommerce enterprise merchants, despite noting some product gaps. Benchmark also reiterated its Buy rating with a $145 price target, emphasizing Shopify’s focus on investing in its commerce platform over immediate free cash flow generation.
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