Shopify (SHOP) AI Stock Analysis

• Market Cap: $250.91B
• Dividend Yield: N/A
• Average Volume (3M): 1.69M
• Price to Earnings (P/E): 77.2
• Beta (1Y): 2.90
• Revenue Growth: 32.77%
• EPS Growth: 84.83%
• Country: CA
• Employees: 8,100
• Sector: Technology
• Sector Strength: 87
• Industry: Software - Application
• EPS (TTM): 0.48
• Shares Outstanding: 1,220,418,800
• 10 Day Avg. Volume: 1,740,777
• 30 Day Avg. Volume: 1,693,268
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.79
• Enterprise Value/Revenue: 21.24
• Enterprise Value/Gross Profit: 42.53
• Enterprise Value/Ebitda: 163.55
• 1Y Price Target: $226.93
• Price Target Upside: 19.37% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 31

• Rating: 79 Outperform
• Price Target: C$221.00 ▲(16.25% Upside)

Shopify's strong financial performance and positive earnings call sentiment are the most significant factors driving the score. Technical analysis supports a positive outlook, although high valuation metrics suggest caution. The company's strategic focus on innovation and international expansion positions it well for future growth.

Positive Factors

Earnings

SHOP posted a strong 2Q beat across revenue, GMV, and OI margin.

International Expansion

SHOP's push upmarket and internationally, from both a product and GTM motion, continues to land well-known brands globally and offers the company a sizable growth opportunity.

Product Innovation

Shopify is well-positioned with new product announcements like Shopify Catalog, Universal Cart, and Checkout Kit, preparing for future trends in commerce.

Negative Factors

MRR Growth

MRR growth has slowed due to a shift to longer paid trials, which may impact future revenue growth.

Profitability

Profitability impacted by higher opex.

Valuation Concerns

Shopify's stock is getting more expensive, making near-term valuation considerations less relevant for some investors.

Shopify Business Overview & Revenue Model

Company Description

Shopify Inc., a commerce company, provides a commerce platform and services in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company's platform enables merchants to displays, manages, markets, and sells its products through various sales channels, including web and mobile storefronts, physical retail locations, pop-up shops, social media storefronts, native mobile apps, buy buttons, and marketplaces; and enables to manage products and inventory, process orders and payments, fulfill and ship orders, new buyers and build customer relationships, source products, leverage analytics and reporting, manage cash, payments and transactions, and access financing. It also sells custom themes and apps, and registration of domain names; and merchant solutions, which include accepting payments, shipping and fulfillment, and securing working capital. The company was formerly known as Jaded Pixel Technologies Inc. and changed its name to Shopify Inc. in November 2011. Shopify Inc. was incorporated in 2004 and is headquartered in Ottawa, Canada.

How the Company Makes Money

Shopify generates revenue through several key streams. The primary source is subscription plans, where merchants pay a monthly fee to access the platform's services, with different tiers offering varying levels of features. Additionally, Shopify earns significant income through transaction fees on sales made via its platform, especially for those on lower-tier plans. The company also generates revenue from its payments solution, Shopify Payments, which takes a percentage of each transaction processed through its system. Other revenue sources include merchant solutions like Shopify Capital, which provides loans to merchants, and additional services such as shipping and fulfillment. Partnerships with various payment processors and e-commerce applications further enhance its offerings and contribute to its earnings.

Shopify Financial Statement Overview

Summary

Shopify demonstrates strong revenue growth and profitability improvements, with a solid equity position and robust cash flows. Despite some volatility in net income and asset levels, the overall financial health is positive.

Income Statement

Shopify has shown a strong revenue growth trajectory, with a 33% increase from 2023 to 2024, and further growth into 2025. The gross profit margin for TTM (Trailing-Twelve-Months) stands at 49.9%, indicating effective cost management. The net profit margin improved significantly in 2025, highlighting increased profitability. EBIT and EBITDA margins have also shown improvement, indicating operational efficiency. However, the company experienced a net income drop in 2024, suggesting some volatility in profitability.

Balance Sheet

The balance sheet reflects a robust equity position with an equity ratio of 82.5% for TTM (Trailing-Twelve-Months), indicating financial stability. The debt-to-equity ratio is low at 0.10, showing conservative leverage. Return on equity improved significantly in 2025, reflecting enhanced shareholder returns. However, the total assets have decreased slightly, and there has been a minor increase in total debt, which may warrant monitoring.

Cash Flow

Shopify's cash flow from operations has remained strong, supporting a healthy free cash flow position, which grew by 8% in 2024. The operating cash flow to net income ratio is favorable, showing effective cash generation relative to reported earnings. The company has also maintained a positive free cash flow to net income ratio. However, investing cash flows have remained negative, indicating continued capital investments which could impact future liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.38B	8.88B	7.06B	5.60B	4.61B	2.93B
Gross Profit	4.68B	4.47B	3.52B	2.75B	2.48B	1.54B
EBITDA	1.22B	1.28B	-8.00M	-383.00M	334.95M	160.21M
Net Income	1.61B	2.02B	132.00M	-3.46B	2.91B	319.51M
Balance Sheet
Total Assets	13.40B	13.92B	11.30B	10.76B	13.34B	7.76B
Cash, Cash Equivalents and Short-Term Investments	5.51B	5.48B	5.01B	5.05B	7.77B	6.39B
Total Debt	1.14B	1.13B	1.15B	1.40B	1.17B	912.89M
Total Liabilities	2.35B	2.37B	2.23B	2.52B	2.21B	1.36B
Stockholders Equity	11.05B	11.56B	9.07B	8.24B	11.13B	6.40B
Cash Flow
Free Cash Flow	1.73B	1.60B	905.00M	-186.00M	453.64M	382.96M
Operating Cash Flow	1.74B	1.62B	944.00M	-136.00M	504.43M	424.96M
Investing Cash Flow	-2.18B	-1.59B	-1.24B	-719.00M	-2.35B	-1.93B
Financing Cash Flow	117.00M	61.00M	60.00M	18.00M	1.65B	3.56B

Shopify Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 190.10
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SHOP, the sentiment is Positive. The current price of 190.1 is above the 20-day moving average (MA) of 187.31, above the 50-day MA of 168.65, and above the 200-day MA of 153.15, indicating a bullish trend. The MACD of 8.90 indicates Positive momentum. The RSI at 54.99 is Neutral, neither overbought nor oversold. The STOCH value of 11.44 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:SHOP.

Shopify Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SHOP	79 Outperform	$250.91B	77.20	22.02%	―	32.77%	84.83%
Sector *	68 Neutral	¥243.52B	15.34	6.64%	2.42%	9.16%	-0.15%
OTEX	―	$8.00B	19.04	10.73%	3.28%	―	―
KXS	70 Outperform	C$5.55B	157.94	5.93%	―	15.81%	22.17%
CSU	67 Neutral	C$91.84B	106.05	22.00%	0.13%	19.29%	-1.42%
LSPD	53 Neutral	C$2.26B	―	-36.64%	―	18.75%	-386.84%
DCBO	―	$920.37M	41.84	55.53%	―	―	―

Shopify Corporate Events

Shopify Reports Robust Q2 2025 Financial Results

Shopify Inc. announced a strong financial performance for the second quarter of 2025, with a 31% increase in revenue and a 16% free cash flow margin. This marks the eighth consecutive quarter of double-digit free cash flow margins. The company saw significant growth in North America, Europe, and Asia Pacific, with Europe experiencing a 42% growth in Gross Merchandise Volume (GMV) on a constant currency basis. Shopify’s success is attributed to its continuous innovation and strategic investments, which have attracted merchants ranging from small startups to large global brands.

The most recent analyst rating on (TSE:SHOP) stock is a Buy with a C$85.00 price target. To see the full list of analyst forecasts on Shopify stock, see the TSE:SHOP Stock Forecast page.