Despite Shopify (SHOP 1.40%) posting better-than-expected second-quarter revenue and adjusted earnings per share this week, shares of the e-commerce software-as-a-service platform took a hit following the quarterly update. In total, the stock fell more than 5% on Thursday.

What's even more surprising is that the stock's decline comes as a handful of analysts upgraded their 12-month price targets for the stock after digesting the solid second-quarter results. Indeed, one of the most bullish analysts upgraded his 12-month price target for the stock to $80. Hitting this target within 12 months would be quite an achievement, considering that the stock is already up 70% year to date.

Why is this analyst so bullish? Let's look at the stock's valuation to see if he could be onto something.

The path to $80

RBC Capital analyst Paul Treiber said in a note to investors on Thursday that he was raising his price target for Shopify stock from $75 to $80. Capturing the optimism behind the analyst's aggressive outperform rating on the stock, the new price target translates to about 35% upside from its current price.

To support his upbeat stance, Treiber cited Shopify's better-than-expected second-quarter results, helped by broad-based momentum across its business. Further, the analyst praised Shopify's momentum with its native payments solution and the stickiness of its platform, among other things.

Looking at some areas putting substance behind Treiber's increased bullishness, Shopify's second-quarter revenue impressively rose 31% year over year to approximately $1.7 billion. Analysts, on average, were expecting quarterly revenue of $1.62 billion.

Non-GAAP (generally accepted accounting principles) earnings per share for the period increased from a loss of $0.03 in the year-ago period to a profit of $0.14. Analysts, on average, were expecting non-GAAP earnings per share of $0.05.

Capturing the stickiness of Shopify's platform, management explained during the company's second-quarter earnings call that, among its retailers who use Shopify's point-of-sale technology and also have more than 20 locations, "their Q2 [gross merchandise volume] grew over 120% year-on-year, with more than 70% of their [gross merchandise volume] coming through Shopify Payments, demonstrating our ability to monetize as we move upmarket."

Shopify stock's valuation tells a different story

Clearly, Shopify's business is doing extraordinarily well. The problem is the growth stock's valuation. Measured by pretty much any valuation metric, the stock is priced for staggering growth for years to come. Consider that Shopify currently boasts a market capitalization of $75 billion, despite its adjusted operating income only coming in at $146 million for the quarter.

While Shopify may live up to its current valuation, investors interested in the stock might want to wait to see if they get an opportunity to buy into this growth story at a better price. While Treiber has some good points about Shopify's strong business momentum, the stock arguably already prices in the continuation of the company's momentum.

Perhaps this is why many of the other analysts' 12-month price targets for the stock are much lower than Treiber's. Indeed, three of the revised price targets that have come out since the earnings report were in the 50s. These targets may have more conservatism baked in.