Shopify’s Strong Q1 Performance and Growth Potential Justifies Buy Rating

Citi analyst Tyler Radke has maintained their bullish stance on SHOP stock, giving a Buy rating on May 9.

Tyler Radke has given his Buy rating due to a combination of factors that highlight Shopify’s strong performance and growth potential. The company has demonstrated agility and effective execution in a challenging demand environment, with Q1 results showing better-than-expected resilience. Despite a slight decrease in revenue outperformance compared to previous quarters, Shopify has consistently achieved significant revenue and GMV growth, maintaining double-digit free cash flow margins.
Radke’s rating also considers Shopify’s solid Q1 performance driven by growth in payments and merchant solutions. The company reported a 22.8% year-over-year increase in GMV and a 27% rise in total revenue, surpassing consensus expectations. Key growth areas include offline GMV, B2B GMV, and international markets, particularly in Europe. The expansion of Shop payments and an increase in the merchant base further contributed to revenue outperformance, supporting the positive outlook for Shopify’s long-term growth.

Radke covers the Technology sector, focusing on stocks such as Microsoft, NICE, and Adobe. According to TipRanks, Radke has an average return of 6.1% and a 52.16% success rate on recommended stocks.

In another report released on May 9, Morgan Stanley also maintained a Buy rating on the stock with a $112.00 price target.