DA Davidson has reiterated a Buy rating on Shopify Inc. and maintained a $195.00 price target after the e-commerce platform closed out 2025 with strong growth, according to the firm. The price target implies substantial upside from Shopify’s then-current share price of $115.40 and coexists with a steep price-to-earnings ratio of 85.
Shopify reported 31% year-over-year revenue growth for 2025, a performance that DA Davidson says has positive carry into 2026. Management guided to greater than 30% growth for the first quarter of 2026, a forecast that sits well above consensus expectations of 26%. The company’s five-year revenue compound annual growth rate remains notable at 41%.
The stock’s intraday action illustrated market ambivalence. Shares opened roughly 8% higher but reversed course to fall about 12% by midday. DA Davidson linked that pullback to two factors: what the firm described as the ongoing "SaaS-Pocalypse" in the software sector and Shopify’s lower-than-expected free cash flow guidance for the first quarter of 2026. Shopify’s beta of 2.82 was noted as an indicator of the stock’s elevated volatility relative to the broader market.
Despite the intra-session weakness, DA Davidson continues to characterize Shopify as a category leader in e-commerce with expanding international reach. The firm pointed to the company’s continued adoption of agentic commerce capabilities as a strengthening factor for its long-term positioning. DA Davidson regards the recent share decline as a buying opportunity and retained the $195.00 target, which it said equates to roughly 90 times the company’s projected free cash flow for 2026.
Shopify’s most recent quarterly results underpinned the upbeat stance. In the fourth quarter of 2025 the company reported earnings per share of $0.57, beating the consensus forecast of $0.51. Revenue for the quarter reached $3.67 billion, topping the anticipated $3.59 billion.
Analysts outside DA Davidson have taken varying approaches to valuation and outlook. Truist Securities lowered its price target to $110 from $155 and kept a Hold rating, citing concerns about valuation. Canaccord Genuity trimmed its target to $165 from $185 but maintained a Buy rating, noting momentum in Shopify’s business alongside potential AI-driven disruptions in the software sector. These divergent analyst moves offer differing perspectives on the company’s near-term valuation and longer-term trajectory.