Shares gained after the e-commerce company announced changes to its pricing — a move one analyst said positions it for better growth.
“The price we charge for access to the best tools in the trade has remained largely unchanged for the past 12 years,” Kaz Nejatian wrote,
‘s chief operating officer, in a blog post announcing the changes.
“The idea behind the products we create has always been the same: We offer merchants the most powerful, innovative and reliable tools in the industry at a price unmatched in the market,” she wrote. “But what that means, and the resources needed to deliver on that promise, have changed dramatically since we started.”
Shopify’s basic plan costs $39 per month, starting at $29; its Shopify plan will increase to $105 from $79; and its Advanced plan will jump to $399 from $299. Merchants already using Shopify will not be affected for three months.
The Basic plan includes basic reports and two staff accounts, the Shopify plan includes professional reports and five staff accounts, and the Advanced plan includes a custom report builder and 15 staff accounts, according to the Shopify website.
“In order not to change the value of Shopify, we had to change the price,” Nejatian wrote.
Oppenheimer analysts, led by Ken Wong, believe the changes will boost growth in fiscal 2023. He said investors will have to account for the likelihood that some companies will stop using Shopify, but he noted that competitors including
) raised their prices with “minimal impact on retention.” And with competitors charging more, users are less likely to take their business elsewhere, he said.
“Shopify is still significantly underpriced relative to enterprise commerce offerings, in our view,” Wong said. He has an outperform rating on the stock with a $45 price target.
Shopify (ticker: SHOP ) shares rose 9.7% to $46.83 on Wednesday. Over the past 12 months, shares have tumbled about 46%.
The company will post its fourth-quarter earnings on February 15.
Write to Emily Dattilo [email protected]