Shopify (SHOP): Is There More Value Ahead After Recent Share Price Gains?

Shopify (SHOP) shares have been catching the eye of investors, with steady gains over the month and strong momentum over the past 3 months. Some market watchers are now evaluating whether the company’s recent run can be sustained.

See our latest analysis for Shopify.

Shopify’s recent rally reflects renewed optimism about its future, following a year in which its share price rebounded solidly and the 12-month total shareholder return approached 94%. With strong momentum over the last quarter, sentiment around Shopify’s growth potential clearly remains positive.

If Shopify’s momentum has you rethinking what else might be rising, now is a great time to broaden your scope and discover fast growing stocks with high insider ownership

But after such an impressive run, investors may be asking themselves if Shopify’s stock is still undervalued or if its recent performance already reflects the company’s potential growth. Could there be a real buying opportunity here, or is everything priced in?

Most Popular Narrative: 6% Undervalued

With Shopify's widely-followed narrative valuing shares at $161.11, about 6% above the recent close of $151.30, investors are weighing the implications for future returns and upside surprises. This sets the scene for the boldest arguments behind Shopify’s ambitious growth prospects.

Rapid international expansion, upmarket focus, and financial ecosystem growth are diversifying revenue streams and increasing resilience amid evolving digital commerce trends. Aggressive integration of AI and emerging retail channels is boosting merchant acquisition, efficiency, and margins. This positions Shopify as a central digital commerce enabler.

Read the complete narrative.

What is the real engine driving this valuation? The most bullish assumptions hinge on rapid expansion across continents, adoption of advanced ecommerce technology, and significant improvement in merchant profitability. Find out which forward-looking numbers and optimistic projections are at the heart of the consensus.

Result: Fair Value of $161.11 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying competition from global e-commerce giants and rising regulatory challenges could easily undermine Shopify’s ambitious growth outlook and consensus projections.

Find out about the key risks to this Shopify narrative.

Another View: Market Comparisons Raise Questions

While the consensus analyst price target suggests Shopify could be undervalued, the market’s go-to valuation measure paints a different picture. Shopify trades at 83.9x earnings, which stands far above its peer average of 51.5x, the industry average of 32.7x, and even the fair ratio estimate of 42.9x. This wide premium means investors are paying much more for each dollar of earnings, creating substantial valuation risk if expectations slip. Is this premium justified? Or are current prices reflecting too much optimism?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Shopify Narrative

If you see things differently, or would rather form your own conclusions, there’s nothing stopping you from building a unique Shopify story in just a few minutes. Do it your way

A great starting point for your Shopify research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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