12:33 PM EDT, 05/09/2024 (MT Newswires) -- Shopify's ( SHOP ) Q1 results exceeded management's guidance but fell short of elevated investor expectations, Oppenheimer said in a note Wednesday.

Analysts, including Ken Wong, said that while the results fell short of high buy-side expectations, overall fundamentals seem to be intact. In the future, investors might see that management is giving clearer guidance and expect that the gains from investments in 2024 will continue into 2025, the analysts added.

"Investors anticipating higher profitability on 'sandbagged' operating expenses are now coming to terms with a narrower delta. Cautious investors likely ratchet down 'upside' scenarios, and push out revenue and margin upside to 2025," the analysts said.

Management guided Q2 revenue in line with expectations, despite facing challenges from foreign exchange rates and Europe, Middle East, and Africa headwinds. They expect operating expenses to increase sequentially in Q2 due to spending on Summit and sales and marketing efforts, the analysts said.

The company also expects minimal benefit in Q2 from Shopify Plus pricing with the majority of early renewals opting for three-year contracts, the analysts added.

The analysts said that the ecommerce giant is "well led by a visionary and respected management team" and continues to have "multi-year growth potential."

Oppenheimer has an outperform rating and a $90 price target on the stock.

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