Shopify: this analyst just chopped his price target

National Bank Financial analyst Doug Taylor says Shopify’s (Shopify Stock Quote, Chart, News, Analysts, Financials NYSE:SHOP)  recent multiple compression has created a compelling entry point, with the company continuing to stand out as a rare Canadian technology name combining high organic growth, scale, profitability and liquidity.

Taylor maintained his “Outperform” rating on Shopify (but lowered his target price to US $155.00 from US$200.00 The average target on the Street is US$156.99.

“Shopify remains a rare combination of high organic growth, scale, profitability and liquidity amidst the investable Canadian technology universe,” Taylor said. “While its model would seem to exhibit many qualities that should make it resilient to the AI-related questions dogging most software and services stories, it has nonetheless seen its premium multiple retreat from the highs alongside the broader sector, including a sharp recent negative reaction to otherwise solid in-line Q1 results. This has created what we see as a compelling entry point.”

Shopify released its first-quarter 2026 results on May 5, reporting revenue of US$3.17-billion for the quarter ended March 31, up 34% from US$2.36-billion a year earlier. Gross merchandise volume was US$100.7-billion, up from US$74.8-billion in the same period last year, while monthly recurring revenue increased to US$212-million from US$182-million.

The company generated gross profit of US$1.55-billion, compared with US$1.17-billion a year earlier, and operating income of US$382-million, up from US$203-million. Free cash flow was US$476-million, compared with US$363-million in the first quarter of 2025, while its free cash flow margin held steady at 15%.

“Shopify has entered the AI era with a clear edge: strong, durable growth and two decades of commerce intelligence,” president Harley Finkelstein said in the company’s release. “That puts us in a category of one, and we’re about to see that advantage compound throughout 2026.”

Chief financial officer Jeff Hoffmeister said the quarter showed broad-based momentum across geographies, merchant sizes and channels, with more than US$100-billion of GMV in the first quarter alone.

“That is the platform compounding,” Hoffmeister said. “The durability of this model allows us to invest strategically in growth, both in the merchant-facing tools that drive commerce innovation and in the internal capabilities that let us build and ship faster.”

For the second quarter of 2026, Shopify said it expects revenue to grow at a high-twenties percentage rate year-over-year, with gross profit dollars increasing at a mid-twenties percentage rate. The company expects operating expenses to represent 35% to 36% of revenue, stock-based compensation of US$145-million and free cash flow margin in the mid-teens.

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