Shopify could be at an inflection point as it shows an ability to thrive in the enterprise space, MoffettNathanson said. Analyst Michael Morton upgraded the e-commerce stock to outperform from market perform. His $76 price target implies shares could rally 16% from Friday’s close. The upgrade “implies expectations for an inflection in the business that consensus is currently missing,” Morton said in a note to clients Monday. “This is our intention as we expect Shopify to gain increasing traction with enterprise customers going forward. Better yet, early signs suggest the transition to the enterprise is already underway.” The stock jumped 2.6% before the bell Monday. It’s up nearly 89% since the start of 2023. SHOP YTD mountain Shopify’s 2023 Morton said the company deployed product improvements that made Shopify Plus, which is a special system with more resources for larger merchants, a more attractive solution for enterprise e-commerce. Though the upgrades were not missed by the enterprise market or system integrators, he said Wall Street was “distracted” by the company’s fulfillment network pitfalls. Now, he said the company is “in the early stages of an enterprise inflection.” Preliminary data shows the largest system integrators have used Shopify Plus agencies, while web traffic to the Plus login portal is outpacing competitors. Independent Shopify agencies are also seeing increasing interest from large enterprise customers, he said. Also, the company’s new executive hires should only help the company improve its pitch to enterprise businesses, Morton said. With all of these points together, Morton said the company is showing the ability to be successful in the enterprise space. He recommended investors keep cash available so they can add to any future Shopify volatility. — CNBC’s Michael Bloom contributed to this report
