Piper Sandler analysts Clark Jeffries and Wayne Trinh have downgraded Shopify stock to Underweight from Neutral, citing “an untenable valuation.” They also lowered their price target to $56 from $58. Despite this, Shopify shares have seen a significant increase of 111% this year. However, the Piper analysts believe that the assumptions reflected in the current share price are overly optimistic.
While acknowledging that Shopify has various drivers for growth and profitability, including expanding market share and increasing client fees, Jeffries and Trinh argue that the market’s expectations are too aggressive. They predict that the company’s fundamentals will moderate in 2024 as certain unique events from 2023 pass.
On the other hand, Oppenheimer analysts led by Ken Wong maintain an Outperform rating on Shopify stock with an $80 price target. They believe that the company’s valuation potential extends beyond Black Friday and Cyber Monday, highlighting opportunities to raise prices on its offerings.
Shopify’s impressive third-quarter performance surpassed expectations for both earnings and sales. Looking ahead, the company will be hosting an Investor Day on December 5th.
