Shopify Inc (NYSE:SHOP) ha introduced multiple new initiatives to spur growth, but the stock's valuation is already full at current levels, according to Wedbush.

The Analyst

Wedbush's Ygal Arounian downgraded Shopify from Outperform to Neutral with a 12-month price target lifted from $270 to $305.

The Thesis

Shopify unveiled during its Unite presentation a new suite of services likely to improve and differentiate its platform against rivals, Arounian wrote in the note. Most notably, Shopify detailed "big steps forward" to become a full retail operating system backed by a fulfillment network. Shopify will be able to offer merchants on its platform a more level playing field against industry titan Amazon.com, Inc. (NASDAQ:AMZN)

Arounian said Shopify's multiple investments in its business should help it capture a 6% market share of global e-commerce by 2028, or 21% excluding China. This would represent an uptick from 2% and 4%, respectively, in 2019.

Despite a clear path of growth ahead, the stock's 125% gain since the start of 2019 "appropriately reflect the opportunity ahead," according to the analyst.

Price Action

Shares of Shopify traded lower by 6% at $292.81 at time of publication Tuesday. On Monday, the stock was downgraded by Roth Capital from Buy to Neutral.

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