Shopify’s tariff troubles could be real, Roth says

Shopify remains well-positioned for long-term growth despite near-term softness in consumer demand, says Roth Capital analyst Darren Aftahi.

In his April 24 earnings preview, Aftahi maintains a Buy rating and a 12-month price target of $115 on Shopify (Shopify Stock Quote, Chart, News, Analysts, Financials NYSE:SHOP), citing the company’s continued revenue growth, international expansion and operational flexibility as key strengths.

Based on merchant survey data, Aftahi slightly trimmed his revenue and profit forecasts due to signs of softer consumer demand late in March and early April. However, he emphasized Shopify’s resilience, noting the company has consistently outperformed these surveys in past quarters.

He also pointed to Shopify’s ability to adjust marketing spend, its early adoption of AI tools, and a growing base of large, cross-border merchants as factors that should help sustain margins—even amid macro uncertainty, including potential tariffs.

“We believe SHOP could become more conservative with its forward outlook in the uncertainty of the tariff environment,” he said in his Q1 preview. “However, SHOP has proven to be very flexible on marketing spend and is at the forefront of embracing AI; two levers we believe could be used to help maintain margins were GMV/revenues to soften.

“Moreover, on a TTM avg. international revenue is now 40% and overall, its merchant base is continuing to grow via larger, cross-border, omni-channel, and high-volume merchants, making SHOP a much more global omni-channel company than its original form of smaller merchants drop shipping goods.

“Additionally, Intl. has exceeded expectations and grown faster than N. Am GMV, so we expect these trends to continue or expand in light of potential tariffs.

“However, according to our survey work, we detected some consumer softness in 2H March/1H April in our checks. As such, we have moderated our GMV assumptions for 2Q-4Q25. In short, we have haircut GMV by 200 bps in those quarters, which results in revenues declining 1.5%, on average, with similar trends in 2026. Profits fall 1% as well. With slightly softer expectations going forward, we reduced our price target from $136 to $115.”

Aftahi now estimates Shopify will generate $1.84-billion in adjusted EBITDA on $10.67-billion in revenue in 2025, and $2.31-billion in EBITDA on $12.68-billion in revenue in 2026. His $115 price target is based on 11.5 times expected 2026 revenue.

The analyst said Shopify is likely one of the most exposed companies in the sector to potential tariffs due to the wide range of merchants on its platform and their reliance on sourcing goods from abroad.

“We believe this is especially impactful for smaller merchants importing white-labeled goods from Asia-PAC. Recent U.S. tariffs—up to 145% on Chinese imports (subject to change) and a 10% minimum on most others are significantly raising costs for Shopify merchants, especially those reliant on drop shipping or low-cost imports. The suspension of the $800 de minimis exemption adds further cost and complexity, particularly for cross-border sellers.

“These changes, along with potential shipping-related per diem charges, we believe could begin pressuring merchant margins. In response, Shopify has rolled out tools to calculate duties and taxes at checkout, aiming to help merchants navigate rising costs and maintain transparency with customers.”

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