The investment firm set a price target of $1,150 on the stock, representing 11% potential upside from the stock's Tuesday closing price.
"Shopify is also significantly undermonetized, with product extensions, such as fulfillment, providing a significant upside opportunity," Atlantic Equities said.
"The stock’s valuation is the key hurdle, but the total addressable market is vast, there are increasing benefits to scale, and e-commerce acceleration has sustained as economies reopened," analyst Kunaal Malde said.
Shopify shares at last check rose 2.9% to $1,067.43..
The firm notes that Shopify's gross margins are in the mid-50s, thanks to its 80% subscription gross margin combined with the 40% merchant gross margin.
As of 2019, the company has reached 1.1 million merchants, who sold $61 billion of products to about 300 million consumers.
The coronavirus has accelerated the company's growth, with Atlantic Equities putting Shopify on track to deliver $100 billion in gross merchandise volume in 2020.
The company was able to grow revenue 47% year over year in 2019, generating $1.6 billion on its top line.
"Shopify is powering the fast-growth direct-to-consumer economy, which is seeing digital native merchants leverage targeted marketing to reach consumers," Malde said.
"Our analysis indicates e-commerce itself should deliver double-digit growth for the foreseeable future, even after the pandemic-driven acceleration in 2020, supporting the longevity of Shopify’s growth."
Founded in 2004, Shopify provides a software-as-a-service platform that helps small businesses create online storefronts.
Shopify Chief Operating Officer Harley Finkelstein is a scheduled guest on Jim Cramer's "Mad Money" broadcast tonight.