Shopify (SHOP) is likely to have a "solid" Q4, with its shares poised to remain at the high end of its three-year historical range, based on the company's strong growth momentum and the market's enthusiasm to its artificial intelligence innovations, RBC Capital Markets said in a Tuesday note.

Several third party platforms have indicated that merchant growth and market share gain for the company in Q4, such as Store Leads data showing that Shopify's Q4 total merchants rose 18% from a year ago on strong momentum outside the US at 23%, RBC analysts said.

The company's job postings for Q4 dropped 16% year over year, pointing to higher profit margins given Shopify's strong gross merchandise volume, the analysts said. They project that its Q4 adjusted earnings before interest and taxes, or EBIT, margin could surpass consensus estimates of 19.6%.

Shopify's Q4 revenue and adjusted EPS may also exceed consensus around the same magnitude as the trailing twelve months average, given that gross merchandise volume is likely to also beat the consensus, according to the note. The analysts expect Q1 guidance to be slightly above consensus due to sustained growth momentum.

RBC analysts maintained the company's stock rating at outperform with $200 price target.

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