Key Takeaways
- Shopify stock jumped 33% in a month on Meta’s Muse deal, and ATB Cormark downgraded it after the run.y
- On the We Study Billionaires podcast, Daniel Mahncke argued that the stock rose because earnings roughly doubled, while the premium investors pay stayed the same.
- Shopify’s normalized EPS roughly doubled from 2023 to 2025, and its forward P/E of 80x is close to its 3-year average.
- At that price, AI-agent orders have to keep growth strong while AI costs press on margins, and third-quarter results on Nov. 3 are the first test.
Shopify (SHOP) has been on a tear. The stock soared 33% in a month after Meta’s Muse deal, even as Amazon (AMZN) blocked Muse from its own site. Then ATB Cormark downgraded it to Sector Perform on Oct. 22.
Daniel Mahncke took up the valuation question on a recent episode of the We Study Billionaires podcast. He put Shopify at 112x operating profits, the same multiple it had when the show first looked at the stock last year. His read:
“Shopify has not grown into its multiple at all. The stock doubled because the earnings roughly doubled, and the market just kept paying the same premium the whole way.”
That’s a compliment and a warning in one.
The rally came from earnings
TIKR’s figures mostly back him up, using forward earnings. Shopify trades at 80x forward earnings. That’s close to its 3-year average of 74x and well below the 114x it hit in October 2025…
…while normalized EPS roughly doubled, from $0.73 in 2023 to $1.43 in 2025. Analysts expect $1.91 this year and $3.32 by 2028.
So the Muse rally didn’t stretch the valuation. But the stock is still priced for that growth to keep coming. Even if Shopify hits the 2028 estimate, today’s price is roughly 51x those earnings. That’s about the lowest forward multiple the stock has had in three years (50.7x in May).
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
A leaner Shopify did a lot of the work
Much of that earnings growth came from margins. Shopify’s operating margin climbed from 3.7% in 2023 to 16.4% in 2025.
Management credits headcount discipline, saying headcount has been flat to down for more than two years. Operating expenses fell to 34.0% of revenue in the second quarter of 2026, from 37.7% a year earlier.
Agents are the growth the premium needs
An 80x multiple needs faster growth than cost cuts can deliver, and Shopify’s bet for that growth is AI shopping agents. Mahncke noted that “orders to Shopify stores attributed to AI search are roughly 15x since January of 2025.” Management says those orders earn Shopify the same as orders on a merchant’s own store.
Plus: Mahncke explained that any developer can plug into Shopify’s catalog with no approval needed, through the commerce standard Shopify and Google wrote. So “every new AI shopping app anyone builds becomes basically another storefront for Shopify merchants to sell through by default.”
That puts Amazon in an awkward spot. It wants its own agents shopping everywhere, but it keeps outside agents like Muse off its own site. Mahncke doesn’t think it can keep that balance for long.
Sidekick comes with a bill
But AI is costing Shopify too. Subscription gross margin fell to 79.7% in the second quarter of 2026, from 81.6% a year earlier, as cloud and infrastructure costs, including AI usage, rose $37 million. The CFO said most of the cost of merchants using Sidekick, Shopify’s AI assistant, lands in that line.
Payments are growing faster than subscriptions, and they carry thinner margins, which also pulled overall gross margin down to 48.1% in 2025 from 50.4%. Over the past year, analysts raised their 2027 revenue estimate 15% but their 2027 EPS estimate just 2%. They’re expecting more sales at a thinner profit, and an 80x multiple needs the profit to keep up.
Priced for no slip-ups
Mahncke has it right. Shopify earns roughly twice what it did in 2023, and investors are paying about the same premium for those earnings as they did then.
My take: Shopify is a great business. But at 80x forward earnings, it’s priced for agents to keep growth strong and for cost cuts to keep outrunning the AI bill. After a 33% month, I’d want to see both hold up before buying.
The first test is third-quarter results on Nov. 3. Management expects revenue growth in the low thirties and gross profit growth in the mid-to-high twenties. Of course, Shopify has beaten the top of its own revenue guidance three quarters running, so it may clear that bar too.
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!
