Fundamentals snapshot
SHOP · NMS · Technology · Software - Application
Current price
$110.78
52-week range
$94.00 - $182.19
Market cap
$143.75B
One-glance verdict
Fair-value range $33.92 – $58.41 (cautious → optimistic — tap the ? for the math)
Wall Street consensus: $150.11 (253.5% higher than our fair-value estimate)
Buy below $33.97 for a 20% safety cushion
Balance sheet
Net cash $5.56B. Interest coverage shows how many times profit covers the interest bill.
What stands out
Quick scan of the biggest positives and negatives from the detailed checklist below.
What this company does
Shopify offers an all-in-one platform that helps businesses set up shop and sell their products both online and in person. The company earns money primarily through predictable monthly subscription fees, which create recurring revenue (income the company can reliably count on), and by taking a small percentage of the sales its customers make. This means Shopify's own success is tied to the growth of the many businesses using its tools to sell more products.
Shopify was started in 2004 by three friends who wanted to sell snowboarding equipment online but were frustrated with the existing e-commerce software. They decided to build their own platform, which they initially used for their snowboard store, Snowdevil. Realizing the software they built was more valuable than the snowboards, they launched it in 2006 as Shopify, a platform for others to create their own online stores. Key turning points included introducing a subscription model for predictable revenue, launching an App Store in 2009 for customization, and adding Shopify Payments in 2013 to simplify transactions for its merchants.
Shopify provides the tools for a business to sell products to customers, both online and in person. Think of it like a digital landlord that gives a business everything it needs to set up and run its shop, including a website storefront, payment processing, and inventory tracking. This allows anyone from a small home-based business to a large, well-known brand to create their own online store without needing to be a tech expert. The company also offers point-of-sale hardware (the systems used to process in-person payments) for physical stores, connecting their online and offline sales in one place.
This is how Shopify makes money from the monthly or annual fees that businesses, known as 'merchants', pay to use its platform. There are different pricing tiers, from basic plans for new entrepreneurs to a more powerful version called Shopify Plus for large, high-volume businesses. This part of the business provides a steady and predictable stream of income for the company. This segment accounts for a smaller portion of total revenue, roughly a quarter of the company's income.
This is the larger and faster-growing part of Shopify's business, making up about three-quarters of its revenue. It includes a variety of services that help merchants run and grow their businesses, and Shopify takes a cut of the activity. The biggest piece is Shopify Payments, where the company earns a fee for processing customer credit card transactions. Other services in this segment include fees for shipping labels, small business loans through Shopify Capital, and sales of hardware for in-person stores.
Shopify is heavily focused on expanding its business internationally, creating tools that make it easier for its merchants to sell to customers in other countries. The company is also pushing to attract larger, enterprise-level businesses to its Shopify Plus and Commerce Components platforms. Another major priority is leveraging artificial intelligence (AI) to help merchants operate more efficiently and create better shopping experiences for their customers. Finally, Shopify continues to develop its financial products, like payment processing and business loans, to become more deeply integrated into its merchants' daily operations.
Price history
Earnings history
Click any quarter to read the call summary and what the numbers say.
Is it cheap or expensive?
Wall Street consensus is the average analyst price target: $150.11 (253.5% higher than our fair-value estimate).
Buy below $33.97 for a 20% safety cushion. That means buying at least 20% below our fair value, as a buffer in case our estimate turns out too rosy.
Our most-likely fair value is $42.46 a share — about 61.7% below today's price of $110.78, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Net cash $5.6B - more cash than debt. Interest coverage 1639.1x.
Shopify Inc.'s profit covers its interest bill about 1639.1 times over. which is stronger than every peer shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Total debt $179.00M Interest coverage 1,639.13x This is the baseline the peer rows are being compared against.
Total debt $1.59B Interest coverage 0.46x -100% vs SHOP Carries about 3584.2x less debt cushion than SHOP.
What you should know
The numbers
Tap any ? icon to learn what it means.
Valuation
Profitability
Health
Growth
Cash flow
Dividend
Metric explainer
Debt comparison
What you should know