Shopify (SHOP) AI Stock Analysis

• Market Cap: $300.24B
• Dividend Yield: N/A
• Average Volume (3M): 1.59M
• Price to Earnings (P/E): 117.4
• Beta (1Y): 2.71
• 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: 1,692,861
• 30 Day Avg. Volume: 1,589,354
• 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: 0.88
• Enterprise Value/Revenue: 26.38
• Enterprise Value/Gross Profit: 53.46
• Enterprise Value/Ebitda: 167.09
• 1Y Price Target: $251.49
• Price Target Upside: 17.40% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 26
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 78 Outperform
• Price Target: C$277.00 ▲(29.31% Upside)

Shopify's strong financial performance and positive earnings call sentiment are the most significant factors driving the score. The technical analysis supports a positive outlook, though the high valuation presents a risk. Overall, Shopify is well-positioned for growth, but investors should be mindful of the premium valuation and potential short-term volatility.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term expansion and stability.

AI Integration

AI integration enhances operational efficiency and customer engagement, positioning Shopify as a leader in innovative e-commerce solutions.

International Expansion

Strong international growth diversifies revenue streams and reduces reliance on domestic markets, enhancing global competitiveness.

Negative Factors

Gross Margin Decline

Declining gross margins could pressure profitability, affecting long-term financial health if not addressed through cost management or pricing strategies.

Increased Transaction Losses

Rising transaction losses can erode profit margins and indicate potential risks in payment processing operations, impacting financial stability.

High Stock-Based Compensation

High stock-based compensation can dilute shareholder value and increase operational costs, potentially affecting long-term profitability.

Shopify Business Overview & Revenue Model

Company Description

Shopify Inc. (SHOP) is a leading e-commerce platform that enables businesses of all sizes to create, manage, and scale their online stores. Founded in 2006, the company operates primarily in the technology sector and provides a comprehensive suite of services including website creation, payment processing, inventory management, and marketing tools. Shopify's core products include its user-friendly e-commerce platform, Shopify Plus for enterprise customers, and various add-ons and apps that enhance the functionality of online stores.

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 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	334.95M	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: Neutral
• Last Price: 214.22
• 50DMA: Negative
• 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 Neutral. The current price of 214.22 is below the 20-day moving average (MA) of 230.73, below the 50-day MA of 216.47, and above the 200-day MA of 170.43, indicating a neutral trend. The MACD of 3.19 indicates Positive momentum. The RSI at 40.98 is Neutral, neither overbought nor oversold. The STOCH value of 15.41 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:SHOP.

Shopify Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SHOP	78 Outperform	$300.24B	117.44	15.74%	―	33.71%	28.57%
KXS	71 Outperform	C$4.72B	136.84	8.24%	―	15.11%	75.40%
OTEX	67 Neutral	$13.64B	20.11	12.32%	2.76%	-5.01%	13.21%
DCBO	65 Neutral	$1.02B	34.83	55.53%	―	18.51%	32.49%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
CSU	61 Neutral	C$75.67B	87.38	22.00%	0.17%	19.29%	-1.42%
LSPD	61 Neutral	C$2.15B	-2.48	-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.

The most recent analyst rating on (TSE:SHOP) stock is a Buy with a C$185.00 price target. To see the full list of analyst forecasts on Shopify stock, see the TSE:SHOP Stock Forecast page.

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.

The most recent analyst rating on (TSE:SHOP) stock is a Buy with a C$185.00 price target. To see the full list of analyst forecasts on Shopify stock, see the TSE:SHOP Stock Forecast page.

Shopify Appoints Jessica Hertz as New COO

On October 9, 2025, Shopify announced the appointment of Jessica Hertz as the new Chief Operating Officer. Ms. Hertz, who has been with Shopify since 2021 as General Counsel, brings a wealth of experience from her previous roles in the White House, Facebook, and Jenner & Block LLP. Her appointment is expected to strengthen Shopify’s operational leadership, although there are no arrangements or family ties influencing her new role.

The most recent analyst rating on (TSE:SHOP) stock is a Buy with a C$200.00 price target. To see the full list of analyst forecasts on Shopify stock, see the TSE:SHOP Stock Forecast page.

Shopify COO Kasra Nejatian to Depart Soon

Shopify Inc. announced that its Chief Operating Officer and Vice President of Product, Kasra Nejatian, will be leaving the company on September 12, 2025. The executive team, known for their deep experience, will take over Nejatian’s responsibilities to ensure a seamless transition, highlighting the company’s preparedness for leadership changes.

The most recent analyst rating on (TSE:SHOP) stock is a Hold with a C$150.00 price target. To see the full list of analyst forecasts on Shopify stock, see the TSE:SHOP Stock Forecast page.

Shopify Reports Strong Q2 2025 Performance

Shopify Inc. is a global commerce company that provides essential internet infrastructure for commerce, offering tools to start, scale, market, and run retail businesses of any size. It is known for its speed, customization, reliability, and security, powering millions of businesses in over 175 countries.

Shopify’s Earnings Call Highlights Growth and Innovation

The latest earnings call from Shopify Inc. painted a largely positive picture, highlighting significant revenue growth, international expansion, and innovative advancements in AI and payments. Despite some challenges with declining gross margins, the overall sentiment was optimistic, driven by strong financial performance and strategic growth initiatives.

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.