Shopify Inc's (SHOP) Target Price Lowered Amid Lower Software Valuation Concerns

Shopify Inc. (NASDAQ:SHOP) is one of the 10 best beaten down software stocks with the highest upside potential. On February 16, Jefferies analyst Samad Samana reaffirmed a Hold rating on Shopify Inc. (NASDAQ:SHOP) while lowering the firm’s price target. The analyst cut the firm’s price target on the stock from $160 to $125. According to the analyst, the company delivered strong fourth-quarter results and provided encouraging guidance for the first quarter of 2026. Jefferies also adjusted its financial model to reflect its revised forecasts and the lower valuations currently seen across the software sector.

In its Q4 earnings report on February 11, Shopify Inc. (NASDAQ:SHOP) said that it was the first quarter ever with revenue over $3 billion. Revenue in North America grew 28%, helping the company capture more than 14% share of the U.S. e-commerce market. Offline channel revenue for the quarter reached $748 million, representing a 27% growth rate. Growth in its International merchant base was even stronger, with revenue increasing 36% YoY. Gross profit growth was 24% for the full-year, while it was 25% for Q4. Operating expenses for the quarter came in at $1 billion, equal to 29% of the revenue. The company generated $715 million in free cash flow during the quarter, about 19% of revenue. For the full year, free cash flow reached $2 billion. The company’s board also approved a share buyback program of up to $2 billion.

Shopify Inc. (NASDAQ:SHOP) operates as a commerce technology company. The company offers tools to run, start, market, and scale a business of any size across the United States, Canada, the Middle East, Europe, Latin America, Africa, and the Asia Pacific. It is also involved in the sale of themes and apps, advertising on the Shopify App Store, point-of-sale hardware,  shipping labels through Shopify Shipping, and Shop Campaigns for buyer acquisitions.

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