MoffettNathanson analysts upgraded shares of Shopify (NYSE:SHOP) to Outperform from Market Perform, with a new price target of $76, up from $35 per share in a note Friday.
They told investors that while Shopify trades at an elevated multiple, upgrading to Outperform "implies expectations for an inflection in the business that consensus is currently missing."
"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 analysts wrote.
"While Wall Street was distracted by the pitfalls of Shopify's fulfillment network, the company deployed a series of product improvements making Shopify Plus a more attractive e-commerce solution to the enterprise," they added.
The firm believes its research suggests the company is in the early stages of an enterprise inflection with preliminary data such as web traffic to the Shopify Plus login portal outpacing traffic to incumbent enterprise solutions and independent Shopify agencies experiencing increasing inbound interest from larger enterprise customers, pointing to increasing traction.