Shopify pricing changes ‘overdue for quite some time,’ says Truist

Commenting on Shopify’s announced pricing changes from the company’s Basic, Shopify, and Advanced plans, Truist analyst Terry Tillman says that price increases have been overdue for quite some time, particularly considering the degree of platform investments and innovation made over the past decade, with effectively no corresponding price changes. The firm thinks Shopify’s value proposition remains strong, especially the all-in-one growth platform positioning in the lower end of the market. While the price increases could impact some unit adds where price sensitivity is more meaningful, Truist could envision these moves being growth and earnings accretive in the future. The firm is also constructive on innovation investments in the upmarket enterprise opportunity and Shopify Fulfillment Network. All of this said, Truist would like to hear about further operational efficiencies and improved path to profit/operating leverage on the upcoming 4Q call. The firm has a Hold rating on the shares with a price target of $41.