-- CIBC Capital Markets reiterated its outperformer rating and its US$185 price target on the shares of Shopify (SHOP.TO, SHOP), as it provided first quarter preview for the company.
Shopify reports Q1 results on May 5 followed by a conference call, said CIBC.
CIBC expects SHOP to meet or beat Q1 consensus and provide constructive Q2 guidance, supported by strength in payments, new merchant adds, and Europe.
"Our alt data reinforces this view and suggests Q1 momentum is extending into early Q2: Plus merchants we track saw web-traffic growth accelerate to ~25% Y/Y in April (vs. 20% in Q1 and ~17% last quarter; through Apr 11)," said CIBC.
It added that this supports upside to GMV and positions SHOP to exceed revenue growth and FCF margin expectations.
"Our outlook assumes faster Merchant Solutions growth (offsetting slower Subscription Solutions), supported by CIBC alt-data trends for Plus merchants, EMEA momentum, enterprise and retail POS adoption, and AI integrations," added CIBC. "Key offsets include mix-driven gross margin pressure (Payments) and higher opex from reinvestment in R&D and S&M; we also assume a higher tax rate in Q1 that normalizes later in 2026."
It noted that, since March 2025, SHOP has beaten consensus by ~3% on revenue and ~4% on FCF, on average. CIBC said that a key risk remains execution against FCF margin guidance in the low-to-mid-teens, with FactSet aligned currently implying it will be below Q1/25.
"Our price target is (US)$185, based on 12x our 2027E sales forecast plus cash and its equity stake in Flexport," added CIBC. "SHOP's Rule of X (2x growth + FCF margin) continues to screen near the top of comparable constituents in the BVP NASDAQ Emerging Cloud Index, supporting a premium multiple."
Price: $176.40, Change: $+1.21, Percent Change: +0.69%