Shares of Shopify Inc (NASDAQ:SHOP) tanked in early trading on Wednesday after it released first-quarter (Q1) results.

The company's results indicated that its growth investments continue to yield results, according to DA Davidson.

The Shopify Analyst: Analyst Gil Luria reiterated a Buy rating, while slashing the price target from $195 to $140.

The Shopify Thesis: The company made a "good start" to 2026, with revenues growing 34% year-on-year in the first quarter and beating consensus by 2.7%, Luria said in the note.

The recent weakness in its stock presents a buying opportunity, he added.

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Shopify reported revenues of $3.17 billion, above consensus of $3.09 billion. The outperformance is in line with its average beat over the last eight quarters.

The company's GMV (gross merchandise value) grew 35% year-on-year to $101 billion. The analyst credited "a balanced split between same-store growth and new merchant adds.”

For the second quarter, Shopify guided to revenue growth in the high twenties, versus consensus of around 28%, which implies a slight deceleration from the first quarter's 32% revenue growth in constant currency terms, Luria noted.

However, this does not signal any weakness in the company's fundamentals, he said. Rather, it "should be viewed as a conservative," while the previous go-to-market investments continue yielding results.

"Shopify’s growth engine appears in good shape as we enter a transformational change in the commerce landscape through the introduction of agents," the analyst wrote.

Shopify has "a massive opportunity" to capture market share in ecommerce over the coming years, through its ongoing ability to add established brands and grow with merchants, he added.

SHOP Price Action: Shares of Shopify had declined by 2.35% to $105.10 at the time of publication on Wednesday.