Rockcliffe Capital Initiates Coverage on Shopify Inc. (TSX: SHOP | NYSE: SHOP) with a “BUY” Rating and 12-Month Price Target of $130 USD

Core Viewpoint - Rockcliffe Capital initiates equity research coverage on Shopify Inc., assigning a "BUY" rating with a 12-month price target of $130 USD, indicating significant upside potential from current levels [1][4]. Investment Thesis Highlights - Sustainable Growth: Shopify's revenue increased by 27% year-over-year in Q1 2025, reaching $2.36 billion, driven by growth in gross merchandise volume (GMV) and international expansion [2][3]. - Strong Cash Flow Profile: The company reported a 15% free cash flow margin in the last quarter, with management projecting mid-teens margins for Q2 [3]. - AI & Enterprise Tailwinds: The introduction of new generative AI tools, such as "Sidekick," and the acceleration of enterprise adoption are expected to enhance monetization opportunities [3]. - Global Reach, Expanding Total Addressable Market (TAM): Shopify operates in over 175 countries, gaining traction in emerging markets and B2B sectors [3]. Valuation & Target - Rockcliffe Capital's proprietary model estimates Shopify's 2026E EV/Revenue multiple at approximately 18x, reflecting its leadership in e-commerce infrastructure and anticipated monetization from AI and enterprise initiatives. The $130 USD price target is based on a base-case scenario with potential for further international growth and an increase in SaaS revenue [4].