Shopify (SHOP) AI Stock Analysis

• Market Cap: $200.98B
• Dividend Yield: N/A
• Average Volume (3M): 2.74M
• Price to Earnings (P/E): 91.7
• Beta (1Y): 2.53
• Revenue Growth: 30.60%
• EPS Growth: N/A
• Country: CA
• Employees: 8,100
• Sector: Technology
• Sector Strength: 76
• Industry: Software - Application
• EPS (TTM): 0.36
• Shares Outstanding: 1,218,135,400
• 10 Day Avg. Volume: 2,431,586
• 30 Day Avg. Volume: 2,743,978
• PEG Ratio: -3.49
• Price to Book (P/B): 13.02
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 83.34
• Enterprise Value/Market Cap: 0.72
• Enterprise Value/Revenue: 4.20
• Enterprise Value/Gross Profit: 30.70
• Enterprise Value/Ebitda: 30.72
• 1Y Price Target: $158.52
• Price Target Upside: 2.33% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 36

Shopify exhibits solid financial performance with strong growth and profitability, supported by a positive earnings call. While technical indicators are mixed, the high valuation remains a key concern. Overall, Shopify is well-positioned for continued growth, yet investors should be cautious of valuation risks.

Positive Factors

Market Share Expansion

Shopify gained ~200 bps of U.S. ecommerce share y/y in 1Q vs. ~100 bps y/y in the year ago period.

Product and Service Innovation

Shopify launched a number of new products designed to help merchants navigate rapidly changing tariff policy, showing the company's responsiveness to merchant needs.

Revenue Growth

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

Negative Factors

Gross Margin Trends

A lot of attention was paid to weaker gross margin trends.

Operating Margin

Operating margin slightly below expectations due to continued investment in performance-based marketing.

Potential 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 demonstrates strong revenue growth and profitability improvements, supported by a robust equity position and healthy cash flows. Despite some volatility in net income and asset levels, the overall financial trajectory remains 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
	EBIT
1.19B	1.07B	260.00M	-822.30M	268.64M	90.15M
	EBITDA
1.22B	1.07B	-8.00M	-383.00M	334.95M	160.21M
	Net Income Common Stockholders
1.61B	2.02B	132.00M	-3.46B	2.91B	319.51M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.51B	5.48B	5.01B	5.05B	7.77B	6.39B
	Total Assets
13.40B	13.92B	11.30B	10.76B	13.34B	7.76B
	Total Debt
1.14B	1.13B	1.15B	1.40B	1.17B	912.89M
	Net Debt
-171.00M	-372.00M	-263.00M	-252.72M	-1.33B	-1.79B
	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	-186.47M	453.64M	382.96M
	Operating Cash Flow
1.74B	1.62B	944.00M	-136.45M	504.43M	424.96M
	Investing Cash Flow
-2.18B	-1.59B	-1.24B	-718.57M	-2.35B	-1.93B
	Financing Cash Flow
117.00M	61.00M	60.00M	17.55M	1.65B	3.56B

Shopify Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 154.91
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 154.91 is above the 20-day moving average (MA) of 135.78, above the 50-day MA of 133.81, and above the 200-day MA of 133.45, indicating a bullish trend. The MACD of 5.54 indicates Negative momentum. The RSI at 65.24 is Neutral, neither overbought nor oversold. The STOCH value of 95.07 is Negative, 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
CSU	77 Outperform	C$107.38B	104.11	27.41%	0.11%	20.99%	33.05%
SHOP	77 Outperform	$200.98B	91.72	16.15%	―	30.60%	―
OTEX	74 Outperform	$10.19B	11.49	15.87%	3.67%	-8.74%	307.82%
KXS	73 Outperform	C$5.56B	402.15	2.32%	―	15.14%	-31.45%
DCBO	67 Neutral	$1.13B	35.32	41.12%	―	20.52%	246.69%
LSPD	63 Neutral	C$2.08B	―	-5.18%	―	23.95%	39.68%
Sector *	60 Neutral	$11.59B	10.44	-7.23%	2.94%	7.46%	-10.66%

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.

Spark’s Take on TSE:SHOP Stock

According to Spark, TipRanks’ AI Analyst, TSE:SHOP is a Outperform.

Shopify’s strong financial performance, evidenced by robust revenue growth and solid balance sheet, is a key strength. The positive earnings call further supports the company’s growth trajectory and market confidence. Technical indicators are mixed, with some caution warranted due to high valuation metrics. Overall, Shopify is well-positioned for continued growth, but investors should remain aware of valuation risks and market conditions.

To see Spark’s full report on TSE:SHOP stock, click here.

Shopify to Transfer U.S. Stock Listing to Nasdaq

Shopify Inc. announced its decision to transfer its U.S. stock exchange listing from the New York Stock Exchange (NYSE) to the Nasdaq Global Select Market. This strategic move is expected to take effect with the last trading day on the NYSE being March 28, 2025, and the first trading day on Nasdaq being March 31, 2025. The transfer aims to align Shopify with Nasdaq’s technology-focused market, potentially enhancing its visibility and appeal among tech-focused investors. The company’s listing on the Toronto Stock Exchange will remain unchanged, and the stock will continue to trade under the ticker symbol ‘SHOP’.