Shopify's (SHOP) guidance for Q1 was in line with estimates, but it implies that year-over-year revenue growth will slow, reflecting "some level of conservatism," Wedbush Securities said in a note Tuesday.

Analysts, including Scott Devitt, noted that the company expects year-over-year revenue growth to decelerate to the mid-20% range from 31% in Q4, which had a stable comparison to the prior year.

They attributed this slowdown to factors such as the leap day, foreign exchange headwinds, and a cautious approach from management, as Shopify's Q4 growth exceeded the high end of its guidance range by more than 200 basis points.

The analysts said that during the call, they will focus on the rate at which new merchants are joining and what is driving monthly recurring revenue growth this year, expense plans for 2025 and factors contributing to continued margin expansion, updates on consumer and macroeconomic trends in North America and Europe, the Middle East, and Africa, and progress on growth initiatives like international expansion, point of sale, and business-to-business efforts.

Wedbush remains encouraged by Shopify's strong Q4 results and believes the company is well-positioned for operating margin expansion this year.

"Shopify remains the dominant eCommerce software platform with a large total addressable market opportunity, considerable pricing power within its subscription services, and ongoing payments expansion with expected gross payment volume of more than $225 billion in 2025," according to the note.

Wedbush reiterated its outperform rating and said it plans to review its price target estimates following management's call.

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