Key Takeaways:
- E-commerce Platform Dominance: Q3 2025 revenue surged 32%, driven by strong merchant growth across all segments.
- Price Projection: Based on current execution and AI integration, SHOP stock could reach $133 by December 2027.
- Potential Gains: This target implies a total return of 20% from the current price of $111.
- Annual Return: Investors could see roughly 10% growth over the next 1.9 years.
Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free)>>>
Shopify Inc. (SHOP) just delivered its strongest quarter since the pandemic era, posting 32% growth and hitting $92 billion in gross merchandise volume (GMV).
- The company is executing an aggressive expansion into enterprise retail while simultaneously positioning itself at the center of AI-powered commerce.
- President Harley Finkelstein is leading a transformation centered on what he calls “agentic commerce,” where AI agents help consumers shop conversationally.
- The company already has partnerships with ChatGPT, Microsoft Copilot, and Perplexity to power product discovery and checkout.
- Meanwhile, Shopify’s AI assistant Sidekick had 8 million conversations with merchants in October alone.
Q3 revenue jumped 32% to reach the high end of guidance. The company maintained an 18% free cash flow margin while signing household names such as Estée Lauder Companies and e.l.f. Cosmetics and Michael Kors. Every 26 seconds, a new entrepreneur makes their first sale on Shopify.
Despite this momentum, Shopify stock trades at $111, offering upside for investors who recognize the company’s position as commerce moves toward AI-powered discovery and checkout.
See analysts’ full growth forecasts and estimates for SHOP stock (It’s free) >>>
What the Model Says for Shopify Stock
We analyzed Shopify through its transformation into the infrastructure layer for modern commerce, combining traditional e-commerce strength with emerging AI capabilities.
The company is capturing enterprise retailers at an accelerating pace. Shopify now powers commerce for brands with 80+ years of heritage alongside startups making their first sale.
This diversity provides resilience as the platform scales, with data centers for commerce capturing transaction data, consumer behavior, and merchant needs across billions of transactions.
International expansion is hitting its stride. Europe grew 49% in Q3 and now represents 21% of overall revenue, up from under 18% two years ago.
The company launched Shopify Payments in three additional countries for point-of-sale and expanded capital offerings across new markets.
Using a forecast of 25.2% annual revenue growth and 18.2% operating margins, our model projects the stock will rise to $133 within 1.9 years. This assumes a 65.8x price-to-earnings multiple.
That represents compression from Shopify’s historical P/E averages of 83.8x (one year) and 132.1x (five years). The lower multiple acknowledges execution risks from enterprise integration complexity and potential moderation in small business formation rates.
The real value lies in maintaining leadership as commerce fragments across new channels while scaling enterprise relationships and sustaining the AI infrastructure advantage.
Our Valuation Assumptions
Estimate a company’s fair value instantly (Free with TIKR) >>>
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for SHOP stock:
1. Revenue Growth: 25.2%
Shopify’s growth centers on three engines operating in parallel.
Enterprise retail is accelerating. The company signed Estée Lauder Companies (20+ iconic brands, including Clinique, MAC, La Mer), e.l.f. Cosmetics, Welch’s, and FanDuel in Q3 alone.
These aren’t small wins – they’re generational businesses choosing Shopify to power their next chapter. Many start with just checkout or Shop Pay, then quickly expand to the full stack.
International markets are compounding. Europe’s 49% growth and expanding payment penetration create a multi-year tailwind.
The company is systematically removing friction – launching Tap to Pay in seven new countries, expanding Shopify Capital to Ireland and Spain, and rolling out duties collection at checkout.
AI-powered commerce is emerging. Traffic from AI sources jumped 7x since January, with orders attributed to AI searches up 11x.
Shopify’s Commerce for Agents tools put millions of products at conversational AI’s fingertips, positioning merchants for discovery through ChatGPT and similar platforms.
2. Operating margins: 18.2%
Shopify is expanding profitability while scaling operations. The company delivered 12% operating income in Q3. This reflects disciplined headcount management and AI-driven productivity gains.
Management has held total headcount flat to down for over two years while shipping more products. Internal AI tools like Scout – which indexes hundreds of millions of merchant feedback items – compress development cycles from weeks to seconds. The company uses AI reflexively across product development, support, and operations.
Subscription margins held steady at 81.7% despite higher AI usage costs. Merchant Solutions’ margins of 38.2% face near-term pressure from the expanded PayPal partnership and geographic mix, but the land-and-expand motion with enterprise merchants creates long-term margin expansion opportunities.
3. Exit P/E Multiple: 65.8x
The market values Shopify at 65.8x trailing earnings. We assume the P/E holds steady over our forecast period.
Near-term multiple support comes from AI positioning and enterprise momentum.
- As the infrastructure layer for conversational commerce, Shopify benefits regardless of which AI platforms win consumer adoption.
- The company’s scale – powering millions of merchants and billions of transactions – creates a data moat that strengthens as AI usage grows.
- Risks include execution complexity from rapid enterprise onboarding and potential moderation in SMB formation rates.
- The company must integrate large retailers without disrupting platform stability while maintaining the innovation velocity that attracts these brands.
Build your own Valuation Model to value any stock (It’s free!) >>>
What Happens If Things Go Better or Worse?
Commerce platforms face technology transitions and macroeconomic sensitivity. Here’s how Shopify stock might perform under different scenarios through December 2029:
- Low Case: If revenue growth slows to 20.5% and net income margins at 15.5%, investors still see a 16.3% total return (3.9% annually).
- Mid Case: With 22.8% growth and 16.7% margins, we expect a total return of 60.4% (12.9% annually).
- High Case: If AI commerce accelerates and Shopify maintains 17.7% margins while growing at 25%, returns could hit 115.5% total (21.7% annually).
See what analysts think about SHOP stock right now (Free with TIKR) >>>
The range reflects execution on AI commerce adoption, successful enterprise integration, and the company’s ability to expand internationally while maintaining margin discipline.
In the low case, AI commerce adoption disappoints, or enterprise wins slow as integration challenges emerge.
In the high case, conversational shopping exceeds expectations, enterprise momentum accelerates, and international markets scale faster than anticipated while margins expand ahead of schedule.
How Much Upside Does Shopify Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
See a stock’s true value in under 60 seconds (Free with TIKR) >>>
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
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 stocks mentioned. Thank you for reading, and happy investing!
