Shares of Shopify Inc (NASDAQ:SHOP) fell 2.6% on Monday after Phillip Securities lowered its recommendation on the e-commerce platform from Buy to Accumulate, while simultaneously increasing its price objective to $170 from $160.
Analyst Helena Wang cited recent share price movement as the primary rationale for the downgrade. At the same time, Phillip Securities modestly raised its fiscal 2026 forecasts, increasing revenue and profit projections by 3% and 1%, respectively.
The downgrade follows Shopify's second-quarter report, which outpaced expectations on several fronts. Revenue rose 34% year-over-year, buoyed by a 23% year-over-year increase in subscription solutions and a 37% year-over-year gain in merchant solutions. The merchant solutions uplift was driven by stronger gross merchandise volume growth and increased penetration of Shopify Payments.
Phillip Securities noted that the first half of fiscal 2026 accounted for 47% of its full-year revenue forecast and 40% of its projected adjusted profit after tax and minority interests. The analyst emphasized that e-commerce outcomes continue to be back-end loaded because of seasonality, which affects the timing of revenue and profit recognition across the year.
Margins showed deterioration, with a 90 basis point year-over-year decline. Phillip Securities attributed the margin compression to a shift in revenue mix toward lower-margin merchant solutions and to higher costs related to artificial intelligence and large language models.
Wang observed that both second-quarter revenue and adjusted profit after tax and minority interests exceeded expectations, supported by stronger-than-anticipated GMV growth, broad merchant momentum and persistent strength in merchant solutions, notably Shopify Payments. The analyst also remarked that Shopify remains well positioned to benefit from the emergence of agentic commerce.
The market reaction combined a warmer price target and raised fiscal estimates with a reduced rating, reflecting the analyst's view that recent share price gains alter the risk-reward profile despite continued execution on growth and payments adoption. Investors should weigh the stronger top-line performance and merchant momentum against margin pressures tied to mix and AI investments, as well as seasonal timing of results.