Stifel has trimmed its price objective for Shopify to $115.00 from $175.00 and kept a Hold rating on the shares, reflecting valuation compression despite continued top-line momentum, according to published research.
The research note comes after Shopify reported quarterly results that showed accelerating revenue and momentum across enterprise customers, international markets and deeper Payments adoption. Those operational positives coincided with a mixed market reaction - shares fell sharply amid a broadly softer software sector even as management reiterated its full-year margin philosophy and highlighted strategic initiatives.
Market context and valuation
At the time of the update, Shopify was trading around $116.18 and sitting near a Fair Value estimate, with a trailing price-to-earnings ratio of 85.07 that reflects elevated growth expectations. The stock has shown notable volatility, carrying a beta of 2.82, and is down 20.95% year-to-date, although it recovered 11.59% in the most recent week.
Free cash flow guidance and management commentary
Stifel cited management commentary that the lower free cash flow (FCF) margin guide for the first quarter was partly a function of tax timing. Management reiterated that the company’s margin philosophy for the full year remains unchanged. The firm’s $2 billion share repurchase program was highlighted by Stifel as an indicator of management confidence in the business and capital allocation priorities.
Over the last twelve months Shopify generated $1.9 billion in levered free cash flow and maintains a financial health assessment rated as "GREAT," with liquid assets covering short-term obligations by nearly four times, according to available data.
Growth drivers: agentic commerce and enterprise wins
Stifel pointed to a growing opportunity in agentic commerce for Shopify. The firm noted that orders originating from AI-driven search on Shopify stores have increased 15-fold since January 2025, signaling an emerging shopping pattern. The company also recorded notable enterprise customer wins across large brands, including GM, L’Oreal, Keurig Dr. Pepper, Sonos and Amer Sports, which Stifel said support the enterprise expansion narrative.
Recent financial performance
Shopify reported fourth-quarter 2025 results that beat consensus on both earnings and revenue. The company delivered earnings per share of $0.57 versus expectations of $0.51, and revenue of $3.67 billion compared with a forecast of $3.59 billion. Shopify exited 2025 with 31% year-over-year growth and management has guided to more than 30% revenue growth for first-quarter 2026, which sits ahead of consensus estimates of 26%.
Analyst divergence
Analysts are split on the stock’s outlook. DA Davidson reaffirmed a Buy rating with a $195 price target, citing the company’s growth momentum. Truist Securities cut its target to $110 while keeping a Hold rating and cited material valuation compression. Canaccord Genuity lowered its target to $165 but retained a Buy rating, noting investor concerns regarding potential AI-led disruption. Stifel’s move to reduce its target but keep a Hold rating reflects that same tension between near-term valuation signals and longer-term growth prospects.
Bottom line
Stifel’s downgrade of the target price to $115 signals that the firm sees downside valuation risk today even as it acknowledges Shopify’s operational strengths and the potential of agentic commerce. The company’s recent beat on revenue and EPS, a significant share buyback, and strong cash generation underpin management’s confidence, but the lowered near-term FCF margin guide and high multiple contribute to ongoing debate among analysts about the stock’s valuation and trajectory.