Buy Shopify on pullbacks, this analyst says

National Bank Financial analyst Richard Tse maintained an “Outperform” rating and US $200.00 target on Shopify (Shopify Stock Quote, Chart, News, Analysts, Financials TSX:SHOP), calling the stock a Top Pick after solid first-quarter results.

Shopify reported Q1 revenue growth of 34.3% year-over-year, or 32% in constant currency, ahead of both Tse’s 30.9% estimate and consensus at 30.7%. GMV reached $100-billion, up 35% and above Tse’s $97.9-billion forecast.

Merchant Solutions revenue was $2.42-billion, ahead of Tse’s $2.31-billion estimate, while Subscription revenue rose 21% to $750-million. Adjusted operating margin was 16.5%, up 256 basis points year-over-year, as GAAP operating expenses fell to 36.7% of revenue from 40.9%.

Tse said the second-quarter outlook was in line, but the market appeared to be looking for more upside given investor concerns about software and services disruption from AI.

“We think the pullback provides an opportunity to build a position in the name given our expectation for a continued outsized growth path that’s being fortified with AI,” Tse said in his May 5 bulletin.

Tse said Shopify is using AI to strengthen its position as a system of record for commerce, while also building operating leverage and expanding across revenue streams including POS and B2B.

He expects Shopify to generate Adjusted EBITDA of $2.80-billion on revenue of $14.82-billion in fiscal 2026, improving to $3.58-billion on revenue of $18.54-billion in fiscal 2027.

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