11:51 AM EDT, 06/21/2024 (MT Newswires) -- Shopify's ( SHOP ) merchant adds are showing broad-based strength and meeting internal return on investment estimates based on early 2024 trends, Oppenheimer said in a note Friday.

"We believe sustained merchant strength positions for an above average new revenue cohort, which sets up FY25 favorably," analysts led by Ken Wong wrote in the note. Gross merchandise value is anticipated to reach $67 billion to $68 billion in Q2, compared with the Street estimate of $65.7 billion, the note said.

Oppenheimer said it expects management to continue to invest in channels that show better returns, although management has stressed that its priority is to achieve a double-digit cash flow margin each quarter.

Shopify's ( SHOP ) management is anticipating "potential pressure" on attach rate expansion in the near term as enterprise customers with initially lower attach rates join, but net adds and continued payments adoption should help offset these challenges, according to the note.

Oppenheimer has an outperform rating on the company's stock with a $90 price target.

Price: 64.17, Change: +0.29, Percent Change: +0.45