Is Shopify Worth Its Pricey Valuation?

RBC Dominion Securities analyst Paul Treiber maintained an “Outperform” rating and raised his value purpose on Shopify  (Shopify Stock Quote, Chart, Data, Analysts, Financials NYSE:SHOP) to US$200.00 from US$170.00, saying third-party data level out the company’s improvement momentum and market share options continued by way of the third quarter and that every Q3 outcomes and This autumn steering usually tend to exceed Avenue expectations barely.

The everyday analyst purpose is US$161.21.

“Due to the U.S. federal authorities shutdown, U.S. retail product sales data for September isn’t on the market,” Treiber acknowledged. “Assuming U.S. e-commerce product sales improvement in September was identical to July and August, up 8% year-over-year, e-commerce product sales in Q3 strengthened versus Q2’s 6.7% enhance. Based mostly totally on the delta between Shopify’s exact GMV and U.S. commerce ultimate quarter, we estimate Shopify’s Q3 GMV grew 32% year-over-year to $92-billion, above consensus at $89.1-billion (up 27.8%) and RBC’s forecast of $89.6-billion (up 28.5%).”

As reported by the Globe and Mail, Treiber acknowledged third-party indicators current healthful service supplier improvement and continued share options.

“Retailer Leads data current Shopify’s full retailers rose 13% year-over-year, whereas Shopify Plus retailers grew 21%, every in step with Q2,” he acknowledged. “Enterprise purchaser wins paying homage to Dickies, Eternally 21, and ALDO highlight ongoing energy in mannequin adoption. Apptopia data moreover current Retailer App month-to-month full of life clients up 29% year-over-year, an acceleration from 26% in Q2.”

With GMV monitoring above expectations, Treiber acknowledged every revenue and adjusted earnings per share seemingly exceeded consensus by a wider margin than the newest frequent, though the upside is “seemingly smaller than Q2’s beat.”

Wanting ahead, he expects Shopify’s This autumn steering to barely prime consensus, which at current requires revenue to develop 26% quarter-over-quarter, slightly below its three-year frequent of 27%.

“Strong market share options and ongoing e-commerce energy counsel This autumn steering shall be barely above expectations,” he acknowledged.

Treiber added that Shopify continues to justify a premium valuation, supported by its improvement trajectory and investor optimism spherical AI-driven innovation. “Shopify stays in all probability probably the most compelling pure improvement tales in our safety,” he acknowledged. “It trades at 16× next-12-month EV/Product sales, above its three-year frequent of 10× and above high-growth SaaS associates at 11×.”

The revised US$200 value purpose depends on a 15× 2027 estimated EV/Product sales a variety of, rolled forward from 2026 estimates.

“Given Shopify’s sturdy momentum and market enthusiasm for its AI initiatives, we think about the shares will proceed to commerce near the extreme end of their historic range,” Treiber acknowledged.

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