Shopify (SHOP) AI Stock Analysis

• Market Cap: $199.78B
• Dividend Yield: N/A
• Average Volume (3M): 1.79M
• Price to Earnings (P/E): 92.7
• Beta (1Y): 2.76
• Revenue Growth: 30.60%
• EPS Growth: N/A
• Country: CA
• Employees: 8,100
• Sector: Technology
• Sector Strength: 89
• Industry: Software - Application
• EPS (TTM): 0.35
• Shares Outstanding: 1,218,135,400
• 10 Day Avg. Volume: 1,759,178
• 30 Day Avg. Volume: 1,786,348
• PEG Ratio: 0.06
• Price to Book (P/B): 5.33
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -235.50
• Enterprise Value/Market Cap: 0.22
• Enterprise Value/Revenue: 1.28
• Enterprise Value/Gross Profit: 9.32
• Enterprise Value/Ebitda: 9.33
• 1Y Price Target: $156.36
• Price Target Upside: -0.08% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 35

• Rating: 79 Outperform
• Price Target: C$170.00 ▲(8.63%Upside)

Shopify's strong financial performance and positive earnings call are the most significant factors driving the stock's score. While the technical analysis supports a bullish trend, the high P/E ratio impacts the valuation negatively. Overall, Shopify demonstrates a robust growth trajectory with strategic initiatives that enhance its market position.

Positive Factors

Global Expansion

Shopify continues to take share outside the US with European GMV growth over 30% for the eighth consecutive quarter and expansion of Shopify Payments into 16 new geographies.

Monetization Opportunities

The transition of Meta Shops to external website checkout is expected to unlock incremental payments and ads monetization for Shopify.

Revenue Growth

Shopify achieved consecutive quarters of revenue growth over 25% and GMV growth over 20%.

Negative Factors

Macro Risks

Macro risks pose pressure on merchant activity and cross-border GMV, which affects Shopify’s growth trajectory.

Order Attribution

During the Meta Shops transition period, Shopify merchants tied to Facebook/Instagram shops may temporarily lose order attribution.

Tariff Risks

Potential tariff risks create an overhang, contributing to a slightly lowered price objective for Shopify.

Shopify Business Overview & Revenue Model

Company Description

Shopify Inc. is a leading global commerce platform headquartered in Ottawa, Canada. It operates within the e-commerce software sector, providing businesses with tools to create, manage, and scale their online stores. Shopify's core products include a fully integrated suite of services such as storefront design, payment processing, and shipping solutions, catering to small and medium-sized businesses as well as large enterprises. The platform supports various sales channels, including web, mobile, social media, and brick-and-mortar locations.

How the Company Makes Money

Shopify makes money primarily through a subscription-based model and additional merchant solutions. Subscription Solutions form a significant revenue stream, offering various pricing tiers with different levels of service and features for businesses using its platform. These plans range from basic packages for small businesses to advanced options for larger enterprises. Merchant Solutions represent another critical revenue source, encompassing fees from payment processing via Shopify Payments, transaction fees, and additional services like shipping and fulfillment. Shopify also generates income from its app store, where developers sell plugins and integrations to enhance store functionality, and from partnerships with third-party providers, which expand its ecosystem and service offerings.

Shopify Financial Statement Overview

Summary

Shopify's financial performance is robust, with strong revenue growth and improved profitability metrics. The company maintains a low leverage position and strong cash flow generation, although there is some volatility in net income and asset levels.

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	1.07B	-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: 156.49
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 156.49 is above the 20-day moving average (MA) of 152.49, above the 50-day MA of 146.77, and above the 200-day MA of 143.03, indicating a bullish trend. The MACD of 3.31 indicates Negative momentum. The RSI at 56.34 is Neutral, neither overbought nor oversold. The STOCH value of 66.78 is Neutral, 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	$199.78B	92.65	16.15%	―	30.60%	―
OTEX	75 Outperform	$10.57B	12.00	15.87%	3.48%	-8.74%	307.82%
KXS	74 Outperform	C$5.71B	406.52	2.32%	―	15.14%	-31.45%
DCBO	74 Outperform	$1.17B	37.67	41.12%	―	20.52%	246.69%
CSU	74 Outperform	C$105.36B	102.23	27.41%	0.11%	20.99%	33.05%
Sector *	57 Neutral	$935.42M	14.77	-16.47%	9.74%	10.76%	-36.64%
LSPD	56 Neutral	C$2.22B	―	-33.64%	―	22.09%	-334.14%

Shopify Corporate Events

Shopify Achieves Strong Q1 Financial Results with Robust Growth

Shopify Inc. reported its financial results for the first quarter of 2025, showcasing a 27% increase in revenue and a 15% free cash flow margin. This marks the company’s eighth consecutive quarter of pro forma revenue growth exceeding 25% and highlights its strong operational performance. The results underscore Shopify’s ability to deliver growth and profitability, reinforcing its position as a leading e-commerce platform that supports merchant success across varying market conditions.