What happened

Shares of Shopify (NYSE:SHOP) have climbed as much as 7% today after getting a bullish initiation from Wall Street. Wolfe Research kicked off coverage on Shopify with an outperform rating while assigning a price target of $1,360. As of 11:20 a.m. EDT, the stock had given back some of those gains and was up 4%.

So what

Analyst Deepak Mathivanan believes Shopify has the potential to "play in the FANG leagues over the long term," referring to the popular group of tech giants (which sometimes include another company to make FAANG). Shopify's products and services are very competitive and position the e-commerce specialist to benefit from rising adoption of online shopping. The company is already capitalizing on the convergence of several themes within the e-commerce industry that could reshape global retail, according to Mathivanan.

A shopping cart button next to a delivery truck button

Image source: Getty Images.

Now what

Shopify shares have pulled back meaningfully over the past couple of months, along with many other high-growth tech stocks. As of yesterday's close, the stock was 26% off the all-time highs set in mid-February.

The COVID-19 pandemic created a surge in e-commerce demand in 2020 as people shopped from home, and the company expects the business to return to a "more normalized pace of growth" in 2021 as vaccines are distributed and consumer spending rotates back toward offline retail and other services. Shopify still expects revenue in 2021 to grow at a healthy rate, but did not provide a specific forecast due to ongoing macroeconomic uncertainties.

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