Shopify stock is looking attractive, RBC says

It’s down, like most stocks in the Trump-tariff era, but that means investors might want to take advantage of the sale on shares of Shopify (Shopify Stock Quote, Chart, News, Analysts, Financials NYSE:SHOP), says RBC Capital Markets analyst Paul Treiber.

In a research report entitled “Canadian Technology: Q4/2024 Icons & Outliers”, the analyst considered the effect of tariffs, noting that the average stock in his coverage universe in down nine per cent, year-to-date.

Treiber says tariffs in isolation may not be the problem.

“Even though Q4 was better than expected, consensus revenue estimates across our coverage fell on average 2 per cent for Q1/CY25 and 1 per cent for CY25,” he wrote. “The decline in estimates is similar to the last four quarters. The reduction reflects the continued pushout of expectations for a potential improvement in enterprise discretionary spending. While tariffs are unlikely to have a material direct impact on Canadian tech stocks, broader macroeconomic uncertainty may lead some organizations to defer pending IT projects and reduce discretionary IT spending. New tariffs may also weigh on consumer spending, which is a potential headwind to the stocks in our coverage with payments revenue (e.g. SHOP, LSPD).””

One of three stocks the analyst identified an opportunity in is Shopify (the others being Constellation Software and Kinaxis).

“Shares of Shopify, down 5 per cent year-to-date, appear attractive, as we believe the company will see continued solid growth as a result of market share gains, traction with large enterprises, and expansion into international markets, even despite the possibility that tariffs are a headwind to consumer spending,” Treiber argued.

As reported by the Globe and Mail, Treiber March 21 reiterated his “Outperform” rating and 12-month price target of (US) $145.00 on SHOP.