After the recent pullback in shares of Shopify, Mark Mahaney from Evercore ISI thinks this is an attractive entry point to own a best-in-class e-commerce platform business. Mahaney upgraded Shopify from an “in-line” to an “outperform” rating with a target price of US$75, which is a 13 per cent potential gain from its current trading price of around $66.

Shares in the company have been under pressure since May after the company posted a weaker revenue outlook and the e-commerce giant forecasted slower sales growth and narrower margins for the current quarter.

Mahaney says the decline in the share price and analyst estimates over the past two quarters have largely de-risked Shopify shares. “Shopify has a new leg of growth coming up,” he said in a recent interview with BNN Bloomberg.

He is not the only analyst who thinks the stock is poised for gains. Last week, Reginald Smith from JP Morgan also initiated coverage on the stock with an overweight rating. Smith believes Shopify’s product breadth, ease of use and scale are distinct competitive advantages that will continue to fuel industry-leading growth.

Mahaney says the company’s decision to lean into social media marketing to accelerate its international growth makes tactical and strategic sense. “Lots of companies have been leaning into spending with Meta over the last two years because the return on ad spend has risen nicely.”

Mahaney says Shopify has a significant competitive position with a strong value proposition to merchants, suggesting the e-commerce company has a long runway to upsell its existing merchant base. 

He added that the company’s track record of innovation over several years is unmatched by any other competitors in the market.