TLDR
- Piper Sandler initiated coverage of Shopify with an Overweight rating and a $165 price target
- The firm named SHOP its top pick in the Web Builders sector
- Piper Sandler projects 28% revenue growth in 2027, ahead of the Street’s 24% estimate
- Shop Pay and Shopify POS are seen targeting over $50 trillion in unaddressed global GDP
- Q4 gross merchandise value jumped 31% year-over-year, with Q1 revenue growth guided above 30%
Piper Sandler has named Shopify (SHOP) its top pick in the Web Builders space, kicking off coverage with an Overweight rating and a $165 price target.
The firm sees Shopify as the core infrastructure of global commerce. Despite the stock trading at elevated valuation levels, Piper Sandler argues the risk-reward still makes sense.
The bull case rests on three pillars. The first is cohort analysis. Piper Sandler’s research points to Year-1 cohort performance running well above COVID-era levels, which the firm says supports upside to Street estimates.
The second is payments. The firm estimates Shop Pay and Shopify POS have over $50 trillion in unaddressed global GDP to go after, with rollout still in early stages.
The third is enterprise. Piper Sandler says its web platform tracker shows roughly 80% of top e-commerce sites are still custom-built or not on any major platform — a large opportunity for Shopify to capture.
The firm projects 28% year-over-year revenue growth in 2027, above the Street’s 24% consensus estimate.
Valuation Check
On valuation, SHOP trades at around 9x 2027 estimated revenues and 19x gross profit. That’s not cheap — and the firm acknowledges it has rarely been cheap.
But Piper Sandler notes the stock is trading around the 25th percentile of its historical valuation range over the past few years. That’s a relatively low entry point versus its own history.
ARK Invest holds a $640.5 million stake in SHOP, though that position is down 18% from the prior quarter. As of end of Q4 2025, 101 hedge funds tracked by Insider Monkey held positions in the stock, up from 91 in Q3.
Cathie Wood ranked SHOP second on her list of best stocks for 2026.
Q4 Results and Forward Guidance
Shopify’s Q4 results beat analyst expectations. Gross merchandise value grew 31% year-over-year. Revenue growth also came in above 30% for the period.
For Q1, the company guided for revenue growth of over 30%, keeping the momentum intact.
Following those results, several firms — including Deutsche Bank, RBC Capital, and Cantor Fitzgerald — trimmed their price targets. They pointed to factors including tax rates and valuation concerns.
Patient Opportunity Equity Strategy highlighted B2B growth of 98% year-over-year in Q3, along with international GMV growth of 41%. The firm also flagged Shopify Campaigns, an advertising product showing a 9x increase in merchant budget commitments year-over-year.
Shopify signed Estee Lauder as a Shopify Plus customer during the period — a win for its push into enterprise.
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