Shares of e-commerce company Shopify Inc (NYSE:SHOP) are trading higher after Evercore ISI analyst Mark Mahaney upgraded the stock from In-Line to Outperform rating and announced a price target of $75.

Mahaney noted that a 30% pullback in the stock from the 52-week high has provided an attractive entry point into owning a best-in-class e-commerce platform business.

The analyst said Shopify's very large Total Addressable Market (about $850 billion TAM), very strong competitive position, and upmarket opportunity show that the shares have a resilient long thesis.

The analyst believes Shopify has the potential for materially ramping profitability with FCF margins, which have the scope of a rise from 12% today to high-teens levels by 2026.

According to the analyst, disappointing operating margin outlook over the last two EPS reports and the resulting material share price and estimates corrections have largely de-risked SHOP shares.

The analyst also finds the company's decision to turn to social media marketing to boost its international growth to be tactical and strategic.

SHOP stock has gained 0.6% in the last 12 months. Investors can gain exposure to the stock via ARK Innovation ETF (NYSE:ARKK) and Global X Cloud Computing ETF (NASDAQ:CLOU).

Price Action: SHOP shares are trading higher by 4.31% at $67.48 at the last check on Friday.

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Why Is Shopify's Stock Trading Higher On Friday?