Key Takeaways
- Six big funds cut or sold their Shopify (SHOP) stakes in the three months to June 30, and the stock is up 39% since then.
- Analysts expect Shopify’s earnings to more than double from 2025 to 2028, and at about 75x forward earnings the stock trades near its usual multiple since late 2023.
- The same funds’ Uber (UBER) sales have worked out better, and Uber, Salesforce (CRM) and SAP (SAP) all trade at far lower multiples with more upside to analysts’ targets.
- Selling Shopify before next week’s Q3 report looks like a mistake, unless revenue growth or spending misses management’s guidance.
When six big funds cut the same stock in the same quarter, it’s fair to wonder what they saw. That’s what happened to Shopify (SHOP) in the three months to June 30, according to each fund’s 13F for that quarter, the latest each one has filed.
The sellers haven’t been rewarded yet. Shopify is up 39% since June 30, and it reports Q3 results next week.
Two of them still own plenty
Polen Capital, a $24 billion fund, cut its stake 27% to 4.58 million shares, worth $523 million at June 30. Edgewood Management, a $22 billion fund, cut its stake 32% to 4.11 million shares, worth $469 million. Even so, Shopify was still Edgewood’s No. 8 holding, at 4.8% of its US stocks, and Polen’s No. 11, at 4.5%.
The other four went further. ICONIQ Capital cut its stake by 89%, and Kinetic Partners Management cut 61%, which left Shopify under 1% of each fund.
Steadfast Capital Management and SurgoCap Partners sold all their shares. As of March 31, Shopify had made up about 2% of each of those two funds.
A 13F shows only what a fund held on the last day of the quarter. So we can’t tell when in the quarter they sold, at what price, or why.
TIKR tracks 54 analysts on Shopify. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Shopify, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Shopify’s Analyst Ratings
Their Uber sales look better
Shopify wasn’t the only stock these funds cut. Polen also cut its Uber (UBER) stake 80% to 570,063 shares, and Steadfast sold all of its Uber shares. Uber is down 12% since June 30, so those sales look like the correct call so far.
Polen also cut its small SAP (SAP) stake by 47% and sold its last few Salesforce (CRM) shares. Compared with those three, Shopify is by far the priciest, and analysts see the least upside in it:
- Shopify: about 75x forward earnings, 12% upside to analysts’ average target
- SAP: about 26x, 13% upside
- Salesforce: about 16x, 25% upside
- Uber: about 17x, 55% upside
That gap is the best case for following the sellers.
Shopify’s earnings keep backing the price
Investors pay up for Shopify because its growth keeps showing up. Analysts expect normalized EPS to more than double, from $1.43 in 2025 to $3.36 in 2028:
Revenue has come in above the top of management’s guided range in each of the last three quarters, growing 31%, 34% and 34%.
Shopify says AI-driven orders to its merchants’ stores tripled in Q2 from a year earlier. That was before it partnered with Meta on its Muse shopping agent in September.
The stock isn’t expensive by its own standards, either. At about 75x forward earnings, it sits right around its 74x average at quarter-ends since late 2023, and well below the 96x it reached at the end of 2025. It ended June at 60x, the lowest quarter-end reading in that stretch.
Analysts have kept raising their targets, too and the average now stands at $177, up from $166 a year ago:
The stock has already closed above that, at $179 on Oct. 12, and ATB Cormark downgraded Shopify on valuation on Oct. 22.
Margins are what worry me. Over the past year, analysts raised their 2027 revenue estimate 15% but their 2027 EPS estimate only 2%. In other words, they expect more sales at a thinner profit.
Don’t follow them out
I wouldn’t sell Shopify before the report. Paying 75x leaves little room for a miss. But a business that beats its own guidance quarter after quarter has earned that kind of price.
Frankly, I’d rather hold it through a report than try to buy back in after one.
Of course, a bad quarter would change that. Management guided to Q3 revenue growth in the low 30s and operating expenses of 33% to 34% of revenue.
Growth under 30%, or spending above that range, would make the sellers look a lot smarter. And the funds’ 13Fs for the quarter ended Sept. 30, due by Nov. 16, will show us whether they kept selling as the stock climbed.
So what is Shopify stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
