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Shopify
(TSX:SHOP)
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Rating:78Outperform
Price Target:
C$211.00
▼(-0.86% Downside)
Action:Reiterated
Date:08/10/26
The score is driven primarily by strong financial quality (low leverage and robust free cash flow) and a bullish earnings outlook with continued 30%+ growth and operating leverage. Technicals also support the trend, though near-overbought signals add some caution. The biggest offset is valuation: the very high P/E leaves less room for execution missteps, especially around mix-driven gross profit pressure and rising credit/lending loss exposure.
Positive Factors
Broad-based growth
Shopify is sustaining growth across both transaction volume and revenue, supported by broad expansion across merchants, geographies, and channels. Continued momentum at this scale can reinforce ecosystem adoption, increase payment activity, and provide operating leverage over the next several quarters.
Negative Factors
Gross profit mix pressure
Gross profit growing slower than revenue signals that mix toward Merchant Solutions may constrain margin expansion even while sales remain strong. If this pattern persists, Shopify may need continued efficiency gains to convert rapid volume growth into proportionate operating profit and cash generation.
Read all positive and negative factors
Positive Factors
Negative Factors
Broad-based growth
Shopify is sustaining growth across both transaction volume and revenue, supported by broad expansion across merchants, geographies, and channels. Continued momentum at this scale can reinforce ecosystem adoption, increase payment activity, and provide operating leverage over the next several quarters.
Read all positive factors
Shopify (SHOP) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$238.07B
Dividend YieldN/A
Average Volume (3M)1.97M
Price to Earnings (P/E)85.1
Beta (1Y)2.78
Revenue Growth31.24%
EPS Growth-16.71%
CountryCA
Employees7,600
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.50
Shares Outstanding1,208,570,300
10 Day Avg. Volume1,714,965
30 Day Avg. Volume1,973,407
Financial Highlights & Ratios
PEG Ratio-4.31
Price to Book (P/B)15.54
Price to Sales (P/S)17.78
P/FCF Ratio102.37
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$237.78Price Target Upside11.72% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering31
EPS Forecast (FY)2.67
Revenue Forecast (FY)C$21.32B
Shopify Business Overview & Revenue Model
Company Description
Headquartered in Ottawa, Canada, Shopify Inc. is a global commerce company established in 2004. Operating across Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, and Latin America, it delivers a comprehensive platform ...
How the Company Makes Money
Shopify primarily makes money through two major revenue streams: (1) Subscription Solutions and (2) Merchant Solutions.
1) Subscription Solutions (recurring software revenue)
- Shopify sells access to its commerce platform via paid subscription p...
Shopify Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call highlighted broad, durable growth across GMV, revenue, gross profit and free cash flow, strong payments and international momentum, rapid adoption of AI products (Sidekick and Catalog) with measurable merchant impact, solid enterprise and B2B traction, and visible operating leverage. The main cautions were that agentic commerce is still small versus total GMV (early stage), gross profit growth is expected to lag revenue growth due to mix, and credit/capital products introduce scaling risk and loss exposure. On balance, the positives — especially consistent 30%+ growth across key metrics, expanding payments penetration, strong cohort retention, and accelerating AI-driven product adoption — materially outweigh the limited challenges discussed.Positive Updates
Strong GMV Growth and Scale
GMV rose 32% year-over-year to $116 billion (constant currency >30%), marking the fifth consecutive quarter of GMV growth above 30% and demonstrating broad growth across merchant sizes, geographies and channels.
Negative Updates
Agentic Commerce Still Small Relative to Total GMV
Although agentic/AI channels showed strong growth (traffic and orders up 3x YoY and strong conversion signals), the absolute volume remains small relative to the $116 billion GMV base, indicating early-stage monetization and scale risk.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong GMV Growth and Scale
GMV rose 32% year-over-year to $116 billion (constant currency >30%), marking the fifth consecutive quarter of GMV growth above 30% and demonstrating broad growth across merchant sizes, geographies and channels.
Read all positive updates
Company Guidance
Management guided Q3 to revenue growth in the low‑30% range year‑over‑year, gross profit dollars growth in the mid‑to‑high‑20% range, operating expenses of 33–34% of revenue (versus 37% in Q3 last year), and a free cash flow margin in the high‑teens to low‑20s (inclusive of <1 point tailwind from an accounting change to merchant cash advances), with no significant FX impact expected. For context they pointed to strong Q2 results that underpin the outlook: GMV $116B (+32% YoY), revenue +34% (constant‑currency GMV >30%), Q2 free cash flow margin ~18%, payments penetration 68% of global GMV, Shop Pay GMV +53%, international GMV +37%, offline GMV +32% and B2B GMV +76%.Shopify Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
90
Very Positive
Cash Flow
86
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 13.27B | 11.76B | 8.88B | 7.06B | 5.60B | 4.61B |
| Gross Profit | 6.33B | 5.63B | 4.47B | 3.52B | 2.75B | 2.48B |
| EBITDA | 2.22B | 1.96B | 1.28B | -8.00M | -383.00M | 3.21B |
| Net Income | 1.95B | 1.25B | 2.02B | 132.00M | -3.46B | 2.91B |
Balance Sheet | ||||||
| Total Assets | 14.47B | 15.16B | 13.92B | 11.30B | 10.76B | 13.34B |
| Cash, Cash Equivalents and Short-Term Investments | 4.95B | 5.77B | 5.48B | 5.01B | 5.05B | 7.77B |
| Total Debt | 178.00M | 188.00M | 1.13B | 1.15B | 1.40B | 1.17B |
| Total Liabilities | 1.79B | 1.71B | 2.37B | 2.23B | 2.52B | 2.21B |
| Stockholders Equity | 12.68B | 13.45B | 11.56B | 9.07B | 8.24B | 11.13B |
Cash Flow | ||||||
| Free Cash Flow | 2.36B | 2.04B | 1.60B | 905.00M | -186.00M | 453.64M |
| Operating Cash Flow | 2.38B | 2.07B | 1.62B | 944.00M | -136.00M | 504.43M |
| Investing Cash Flow | 545.78M | -1.21B | -1.59B | -1.24B | -719.00M | -2.35B |
| Financing Cash Flow | -2.82B | -825.20M | 61.00M | 60.00M | 18.00M | 1.65B |
Shopify Technical Analysis
Negative
212.84
Price Trends
188.36
Negative
172.39
Positive
181.56
Negative
Market Momentum
-0.26
Positive
35.88
Neutral
13.96
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SHOP, the sentiment is Negative. The current price of 212.84 is above the 20-day moving average (MA) of 203.97, above the 50-day MA of 188.36, and above the 200-day MA of 181.56, indicating a bearish trend. The MACD of -0.26 indicates Positive momentum. The RSI at 35.88 is Neutral, neither overbought nor oversold. The STOCH value of 13.96 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:SHOP.
Shopify Risk Analysis
Shopify disclosed 48 risk factors in its most recent earnings report. Shopify reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Shopify Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$238.07B | 85.09 | 15.06% | ― | 31.24% | -16.71% | |
73 Outperform | C$8.92B | 35.67 | 11.26% | ― | 11.62% | 19.63% | |
72 Outperform | C$60.48B | 45.31 | 25.24% | 0.20% | 16.53% | 53.02% | |
71 Outperform | C$4.51B | 38.11 | 20.88% | ― | 15.99% | 252.03% | |
70 Outperform | C$7.79B | 5.00 | 28.29% | 4.89% | 0.54% | 54.92% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | C$1.87B | -14.03 | -6.60% | ― | 10.59% | 84.91% |
* Technology Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.