Shopify (NYSE:SHOP) will likely quadruple sales on its e-commerce platform over the coming five years, according to Piper Sandler analyst Brent Bracelin. The analyst cited "early signals that COVID-19 could drive a permanent structural industry change to consumer purchasing behavior." 

As a result, Bracelin upgraded Shopify stock on Monday to overweight (buy) from neutral (hold), and raised his price target to $843, up from its previous level of $733. That represents an implied upside of 14% from the stock's closing price on Friday.

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Bracelin believes shoppers worldwide are participating in a "great digital awakening," the result of widespread stay-at-home orders due to the pandemic. With the exception of the travel industry, digital volumes increased across a number of industries he tracks, up 74% year over year during May, twice the growth rate in the first quarter.

"Leveraging a critical footprint as the global retail operating system for 1 million+ merchants today with an expanding product offering, [Shopify] is one of the best positioned digital commerce beneficiaries for the next decade, in our view, with revenue poised to quadruple to $12 billion by 2025," Bracelin wrote in a note to clients.

This comes on the heels of an announcement that the company is partnering with Walmart (NYSE:WMT), which plans to add as many as 1,200 Shopify merchants to its e-commerce platform as third-party sellers by year-end.

It's worth noting that Shopify stock has already nearly doubled so far in 2020, and Bracelin admitted that its valuation was frothy. "While we acknowledge the sentiment rerating witnessed this quarter (+80% quarter-to-date) adds a substantial amount of near-term valuation risk, we consider Shopify a franchise cloud software holding for growth investors willing to look out beyond 2022 and would recommend building positions."

Shopify currently trades at 52 times trailing-12-month sales, and an only slightly more reasonable forward valuation of 43.

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