Shopify (SHOP) AI Stock Analysis

• Market Cap: $324.55B
• Dividend Yield: N/A
• Average Volume (3M): 1.76M
• Price to Earnings (P/E): 101.2
• Beta (1Y): 3.07
• Revenue Growth: 32.77%
• EPS Growth: 84.83%
• Country: CA
• Employees: 8,100
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.48
• Shares Outstanding: 1,220,477,500
• 10 Day Avg. Volume: 1,559,056
• 30 Day Avg. Volume: 1,763,157
• 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: 0.61
• Enterprise Value/Revenue: 21.24
• Enterprise Value/Gross Profit: 42.53
• Enterprise Value/Ebitda: 163.55
• 1Y Price Target: $235.17
• Price Target Upside: -3.20% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 33

• Rating: 77 Outperform
• Price Target: C$257.00 ▲(5.78% Upside)

Shopify's overall stock score is driven by strong financial performance and positive earnings call sentiment, highlighting robust revenue growth and strategic expansion. Technical analysis supports a bullish outlook, though high valuation metrics and volatility present risks. The absence of corporate events and dividend yield slightly tempers the score.

Positive Factors

Revenue Growth

Shopify's strong revenue growth indicates robust market demand and effective business strategies, supporting long-term expansion and competitiveness.

International Expansion

Successful international expansion, particularly in Europe, enhances Shopify's global footprint and diversifies revenue streams, strengthening its market position.

Product Innovation

Continued innovation in AI and new product offerings improve Shopify's platform capabilities, attracting more merchants and enhancing user experience.

Negative Factors

Gross Margin Pressure

Decreasing gross margins could impact profitability, as cost pressures from partnerships and other factors may limit earnings potential over time.

Leadership Changes

The departure of a key executive like the CRO can disrupt strategic initiatives and affect revenue strategies, potentially impacting long-term growth.

Subscription Solutions Profitability

Lower profitability growth in Subscription Solutions compared to revenue may indicate rising costs or competitive pressures, affecting margin sustainability.

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 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: 242.95
• 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 242.95 is above the 20-day moving average (MA) of 229.42, above the 50-day MA of 212.08, and above the 200-day MA of 168.04, indicating a bullish trend. The MACD of 9.96 indicates Negative momentum. The RSI at 63.62 is Neutral, neither overbought nor oversold. The STOCH value of 84.71 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
SHOP	―	$324.55B	101.23	22.02%	―	32.77%	84.83%
OTEX	―	$13.52B	23.99	10.73%	2.79%	-7.77%	-1.03%
KXS	―	C$5.08B	146.89	5.93%	―	15.81%	22.17%
DCBO	―	$1.03B	36.17	55.53%	―	18.51%	32.49%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
CSU	―	C$80.15B	92.55	22.00%	0.16%	19.29%	-1.42%
LSPD	―	C$2.22B	―	-36.64%	―	18.75%	-386.84%

Shopify Corporate Events

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.