Shopify (SHOP) AI Stock Analysis

• Market Cap: C$303.82B
• Dividend Yield: N/A
• Average Volume (3M): 1.67M
• Price to Earnings (P/E): 123.7
• Beta (1Y): 2.66
• Revenue Growth: 33.71%
• EPS Growth: 28.57%
• Country: CA
• Employees: 8,100
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.48
• Shares Outstanding: 1,222,601,000
• 10 Day Avg. Volume: 1,949,386
• 30 Day Avg. Volume: 1,669,524
• PEG Ratio: 0.05
• Price to Book (P/B): 11.86
• Price to Sales (P/S): 15.44
• P/FCF Ratio: 85.86
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$247.38
• Price Target Upside: 6.00% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 31
• EPS Forecast (FY): 2.03
• Revenue Forecast (FY): C$16.03B

• Rating: 77 Outperform
• Price Target: C$253.00 ▲(8.41% Upside)

Shopify's overall stock score reflects strong financial performance and positive earnings call insights, highlighting robust growth in GMV and revenue. Technical analysis suggests a positive trend, though caution is advised due to overbought signals. The high P/E ratio indicates a potential overvaluation, impacting the overall score.

Positive Factors

Revenue Growth

Shopify's consistent revenue growth across quarters highlights its strong market position and ability to expand merchant solutions, ensuring long-term business sustainability.

AI Integration

The integration of AI enhances Shopify's platform capabilities, driving merchant growth and operational efficiency, which is crucial for maintaining a competitive edge in e-commerce.

International Expansion

Strong international growth, particularly in Europe, diversifies Shopify's revenue streams and reduces reliance on any single market, supporting long-term stability.

Negative Factors

Gross Margin Decline

Declining gross margins indicate increasing cost pressures, which could impact profitability if not managed effectively, posing a risk to long-term financial health.

Increased Transaction and Loan Losses

Rising transaction and loan losses could strain financial resources and affect cash flow, potentially limiting Shopify's ability to invest in growth initiatives.

Sales Misrepresentation Issue

While the issue was addressed, misrepresentation in sales practices can undermine trust and require structural changes to prevent future occurrences, impacting long-term sales strategy.

Shopify Business Overview & Revenue Model

Company Description

Shopify Inc. is a leading e-commerce platform that enables businesses of all sizes to create, manage, and grow their online stores. Founded in 2006, Shopify offers a comprehensive suite of tools and services, including website design, payment processing, inventory management, and marketing solutions. The company operates in the technology sector, primarily focusing on the e-commerce and retail industries, and serves millions of merchants globally, providing them with the infrastructure to sell products online, in physical stores, and across various sales channels.

How the Company Makes Money

Shopify generates revenue primarily through subscription fees and transaction fees. Merchants pay a monthly subscription fee to use the platform, which varies based on the features and services they select. In addition to subscription revenue, Shopify earns transaction fees on sales made through its payment processing service, Shopify Payments. The company also offers additional services, such as Shopify Plus for enterprise-level businesses, which commands higher subscription fees due to its advanced features. Other revenue streams include merchant solutions like point-of-sale systems, shipping services, and third-party app integrations. Strategic partnerships with payment processors, shipping companies, and other service providers further enhance its offerings and contribute to its earnings.

Shopify Financial Statement Overview

Summary

Shopify exhibits strong financial health with robust revenue growth, profitability, and efficient cash flow management. The balance sheet is solid with low leverage and high equity, providing a stable foundation for future growth.

Income Statement

Shopify's income statement reflects strong revenue growth and profitability. The TTM revenue growth rate of 6.77% indicates a healthy upward trajectory, supported by a robust net profit margin of 23.46%. The company has maintained a solid gross profit margin of approximately 49.28%, showcasing efficient cost management. EBIT and EBITDA margins have improved significantly, indicating enhanced operational efficiency.

Balance Sheet

The balance sheet is stable with a low debt-to-equity ratio of 0.09, suggesting conservative leverage. Return on equity is strong at 21.03%, reflecting effective use of shareholder funds. The equity ratio stands at 83.27%, indicating a solid capital structure. Overall, the balance sheet demonstrates financial stability and prudent financial management.

Cash Flow

Shopify's cash flow statement is strong, with a free cash flow growth rate of 5.20% TTM, indicating healthy cash generation. The operating cash flow to net income ratio of 0.88 and free cash flow to net income ratio of 0.99 reflect efficient cash conversion. The company has shown consistent improvement in cash flow metrics, supporting its growth and operational needs.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.01B	8.88B	7.06B	5.60B	4.61B	2.93B
Gross Profit	4.94B	4.47B	3.52B	2.75B	2.48B	1.54B
EBITDA	1.58B	1.28B	-8.00M	-383.00M	3.21B	160.21M
Net Income	2.35B	2.02B	132.00M	-3.46B	2.91B	319.51M
Balance Sheet
Total Assets	14.56B	13.92B	11.30B	10.76B	13.34B	7.76B
Cash, Cash Equivalents and Short-Term Investments	5.82B	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	2.44B	2.37B	2.23B	2.52B	2.21B	1.36B
Stockholders Equity	12.12B	11.56B	9.07B	8.24B	11.13B	6.40B
Cash Flow
Free Cash Flow	1.82B	1.60B	905.00M	-186.00M	453.64M	382.96M
Operating Cash Flow	1.83B	1.62B	944.00M	-136.00M	504.43M	424.96M
Investing Cash Flow	-2.01B	-1.59B	-1.24B	-719.00M	-2.35B	-1.93B
Financing Cash Flow	158.00M	61.00M	60.00M	18.00M	1.65B	3.56B

Shopify Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 233.38
• 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 233.38 is above the 20-day moving average (MA) of 224.29, above the 50-day MA of 223.89, and above the 200-day MA of 178.73, indicating a bullish trend. The MACD of 2.97 indicates Negative momentum. The RSI at 58.38 is Neutral, neither overbought nor oversold. The STOCH value of 75.81 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
DSG	82 Outperform	C$10.58B	49.10	10.70%	―	14.55%	15.55%
KXS	78 Outperform	C$4.95B	101.46	8.24%	―	15.11%	75.40%
SHOP	77 Outperform	C$303.82B	123.72	15.74%	―	33.71%	28.57%
OTEX	72 Outperform	C$11.72B	17.12	12.32%	3.27%	-5.01%	13.21%
CSU	72 Outperform	C$70.10B	75.78	22.10%	0.17%	18.24%	7.72%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
LSPD	53 Neutral	C$2.30B	-2.59	-37.01%	―	17.23%	-435.45%

Shopify Corporate Events

Shopify Reports Strong Q3 Growth and Profitability

Shopify Inc. reported a strong financial performance for the third quarter ending September 30, 2025, with a 32% increase in both revenue and gross merchandise volume (GMV), and an 18% free cash flow margin. This marks the ninth consecutive quarter of double-digit free cash flow margins, highlighting the company’s consistent growth and profitability. The results underscore Shopify’s effective execution and its ability to support merchants from small entrepreneurs to global brands, especially during the busy retail season.

Shopify Reports Robust Q3 Growth and Profitability

Shopify Inc. reported a strong financial performance for the third quarter of 2025, with a 32% increase in revenue and an 18% free cash flow margin, marking the ninth consecutive quarter of double-digit free cash flow margins. The company’s growth is driven by its scalable platform that supports both small entrepreneurs and large global brands, contributing to a 32% rise in Gross Merchandise Volume (GMV). These results highlight Shopify’s consistent growth and profitability, positioning it well for the upcoming retail season and reinforcing its role as a leader in the e-commerce sector.