Evercore ISI raised Shopify (NYSE:SHOP) to Outperform from In Line, with a $75 per share price target in a note Friday following the recent pullback in the stock.
SHOP shares are down 15% for the year to date. However, Evercore believes this "has created an attractive entry point to own a best-in-class e-commerce platform business."
"We believe there is a very resilient Long Thesis to SHOP shares," said Evercore. Analysts cited the company's very large total addressable market (~$850 billion), its very strong competitive position and up-market opportunity, its clear track record of successful product innovation, and the potential for materially ramping profitability.
Furthermore, Evercore believes that disappointing Operating Margin outlooks over the last two EPS reports – and the resulting material share price and estimates corrections – have largely de-risked SHOP shares.
"As keen observers of 'Net advertising trends, we also believe that SHOP's decision to lean into Social Media marketing to accelerate its International growth makes tactical and strategic sense," the firm concluded.