One Wall Street analyst thinks Shopify will hit $99. Is it a purchase?

Shopify (STORE 0.72%) has long delivered enviable growth numbers, but its valuation has historically made the stock volatile.

The e-commerce software leader continues to trade at a high valuation, sometimes acting as a battleground, as investors speculate how much longer its rapid growth will continue, especially after its plan to expand into logistics through acquisition Deliverr pushed back.

However, Shopify impressed investors with its most recent earnings report in August, and now another Wall Street analyst is lining up behind the stock.

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Will Shopify Go to $99?

Redburn Atlantic upgraded Shopify stock from neutral to buy on Tuesday morning.

The firm noted the company’s leading integrations into social media and other platforms where businesses advertise and consumers shop, in addition to the increasing functionality of the Shop Pay button.

The company is expected to continue growing as it capitalizes on Gen Z’s online spending. He gave the stock a $99 price target, implying 33% upside.

Is Shopify a buy at $74?

Shopify is the clear leader in e-commerce software, it has held its own against others BigCommerce, Amazonand Square (which has since been rebranded as Block), and continues to find new ways to grow, even as its gross merchandise volume makes it one of the largest retail platforms in the world.

Shopify reported 21% revenue growth in the second quarter, and its free cash flow margin doubled to 16%.

The company is now profitable under generally accepted accounting principles (GAAP), but on an adjusted basis, it still trades at a price-to-earnings (P/E) ratio of 76.

Shopify’s competitive edge gives the stock a long-term edge, but getting to $99 in the next year seems like a tall order, even if the deal executes. Shopify still looks like a buy, but the current valuation should temper expectations.