Jefferies Cuts Shopify Price Target by 22% to $125 on Valuation Concerns
Jefferies lowered Shopify’s price target from $160 to $125, citing weaker software-sector valuations despite the company’s record $3 billion Q4 revenue, 28% North America growth and 36% international increase. Shopify generated $715 million in Q4 free cash flow, reached $2 billion FCF for the year and authorized a $2 billion buyback.
1. Jefferies Price Target Cut
Jefferies analyst Samad Samana reaffirmed a Hold rating and lowered Shopify’s 12-month price target to $125 from $160, reflecting a pullback in software-sector valuations despite the company’s robust performance and forecasts for early 2026.
2. Strong Fourth-Quarter Results
Shopify delivered its first quarter with revenue above $3 billion, driven by 28% growth in North America and 36% internationally, while offline channel bookings rose to $748 million. Gross profit expanded 25% in Q4 and operating expenses remained 29% of revenue, generating $715 million in free cash flow.
3. Share Buyback and Guidance
The board approved a $2 billion share repurchase program following full-year free cash flow of $2 billion, and management issued optimistic guidance for the first quarter of 2026, underscoring confidence in enterprise adoption and AI commerce initiatives.