Shopify Inc (SHOP) Stock Forecast & Price Target

Shopify has demonstrated robust financial performance, with Merchant Solutions revenue growing 38% year-over-year to $2.145 billion, surpassing expectations, alongside a significant increase in payment volume representing 65% of GMV. The company is experiencing strong momentum across various channels, with Offline GMV and B2B GMV reporting year-over-year increases of 31% and 98%, respectively, while emerging verticals also show impressive growth rates. With continued traction in international markets, particularly Europe, and positive new business trends, Shopify's total revenue estimates for 2025 and 2026 have been adjusted upward, reflecting confidence in the platform's resilient growth and expanding market opportunities.

The financial analysis indicates a negative outlook on Shopify's stock primarily due to a decline in Non-GAAP gross margins, which fell 280 basis points year-over-year to 49.1%, slightly below expectations, despite a 24% year-over-year growth in gross profit dollars that exceeded management's guidance. Additionally, diluted EPS of $0.20 was significantly lower than both estimated figures, with unfavorable impacts from net unrealized losses on investments, coupled with a deceleration in subscription growth from 17% in the previous quarter to 15%. Lastly, while operating cash flow and free cash flow figures exceeded estimates, the flat to declining headcount suggests underlying operational challenges, contributing further to concerns regarding sustained growth and profitability.