What happened

Shares of Shopify (SHOP -1.05%) were pulling back today on a pair of conflicting analyst notes on the stock. Investors seemed persuaded by an update from UBS, which reiterated a sell rating on the stock. Additionally, the broader sell-off in tech stocks today also seemed to weigh on Shopify shares.

As of 11:45 a.m. ET, the stock was down 3.5%.

So what

Pinpointing the threat from Amazon's Buy with Prime program that is set to roll out to all eligible vendors tomorrow, UBS analyst Kunal Madhukar reiterated a sell rating on Shopify. Madhukar claimed that Buy with Prime could lead to between 6% to 14% of Shopify's revenue and 2% to 6% of its gross profit being at risk. 

Madhukar acknowledged that there was a lot of uncertainty around the potential adoption of Buy with Prime, but said investors should be mindful of the risk. Madhukar kept his $34 price target on the stock, which implies a decline of 32% from its closing price on Friday.

At the same time, Roth Capital Darren Aftahi upgraded Shopify from neutral to buy, saying the difficult comparisons with the boom during the Covid-19 pandemic are in the past. Aftahi believes the company could deliver sales growth as high as 20% in 2023. He also likes the company's recent decision to raise prices and believed the stock deserves a premium valuation. Aftahi raised his price target on the stock from $38 to $56.

Now what

The gap between the two analyst notes above underscores the dilemma Shopify investors face right now. Recent news on Shopify stock, including strong sales over Black Friday weekend and its recent price hike, has been generally positive, and the stock has surged higher so far this year.

However, the expansion of Buy with Prime is a threat that investors should take seriously. We'll learn more after its expansion date, but there's a lot of upside potential for Shopify if it can neutralize the Buy with Prime threat, as there's still a lot of growth left in e-commerce and the stock is down sharply from its peak in late 2021.