SHOP — Shopify Inc.

E-Commerce Platform / Merchant Services · NYSE · Ottawa, Canada

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Our View: We Like It

Shopify powers over 14% of all U.S. e-commerce. Revenue has grown 25%+ for eleven straight quarters. The company now generates $2 billion in free cash flow. And the stock is down 34% from its highs — a pullback on a business that keeps executing. The valuation is rich, but for this caliber of growth and market position, it's a price we're comfortable paying at these levels.

01

The Story

Balanced Grower Strong growth + profitability, but expect some volatility

If you've ever bought something from an online store that wasn't Amazon, there's a good chance Shopify powered the transaction. Shopify is the operating system for independent e-commerce — the platform that millions of businesses use to build their online stores, process payments, manage inventory, and ship products.

The scale is impressive. Over $378 billion in goods were sold through Shopify last year. The company handles more U.S. e-commerce than anyone except Amazon. And it's not just small shops anymore — brands like Mattel, Supreme, and Gymshark run on Shopify. The platform has evolved from a simple store builder into a full commerce infrastructure layer, with payments (Shop Pay), point-of-sale for physical retail, and a growing B2B business.

What's remarkable is the consistency. Shopify has grown revenue 25%+ for eleven consecutive quarters. That kind of streak, at this scale, is rare. Revenue hit roughly $8.9 billion in 2025, up from around $7.1 billion the year before. Free cash flow crossed $2 billion. Operating margins are expanding as the company grows into its cost structure after the painful logistics spinoff in 2023.

The stock pulled back about 34% from its highs, partly on broader market weakness and partly on concerns about tariff impacts on cross-border e-commerce. Those concerns are real but manageable — Shopify helps merchants navigate trade complexity, which could actually strengthen its value proposition over time.

The valuation is the main pushback. At roughly 13x trailing revenue and ~74x trailing earnings, Shopify isn't cheap on any traditional metric. But the growth rate and consistency justify a premium — and on a forward basis, the P/E comes down meaningfully as margins continue expanding.

02	The Numbers

Here's the data for those who want to dig in.

Stock Price

$118.20

Market Cap

~$155B

Free Cash Flow

$2.0B

U.S. E-Comm Share

14%+

What the numbers tell us:

Growth is consistent and profitable. Eleven straight quarters of 25%+ revenue growth. Free cash flow of $2 billion. Operating margins of 18%+ and expanding. The business model is working — and at scale.

Payments are the growth engine within the growth engine. Shopify Payments and Shop Pay are increasingly the default checkout for Shopify merchants, which means Shopify takes a cut of every transaction. As GMV grows, payments revenue compounds.

The valuation demands patience. At ~74x trailing earnings, the stock prices in a lot of future growth. If revenue growth slows below 20% or margins stall, the stock could compress quickly. This is a "pay up for quality" situation — it works if the execution continues.

03

SHOP — Shopify Inc.

The Story

The Numbers

The Chart

Deep Dive: 11 straight quarters of 25%+ growth — and 34% off

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