Key Takeaways:
- Revenue Momentum: Shopify stock generated $11 billion LTM revenue, with Q3 growth of 32% reflecting strong merchant activity and payments expansion.
- Margin Recovery: Operating margins improved to 16%, supporting profitability after expanding from 14% in 2024 through cost control and scale benefits.
- Price Projection: Shopify stock could reach $166 by 2027 based on 25% revenue growth, 18% margins, and an 82x earnings multiple.
- Return Profile: This implies 21% total upside from $138, translating to roughly 10% annualized returns over the next 2 years.
Shopify (SHOP) is a global commerce platform supporting millions of merchants, generating $11 billion LTM revenue as scale continues expanding across subscriptions and merchant solutions.
In January 2026, policy shifts favoring affordability highlighted Shopify as a fintech beneficiary, while ChatGPT checkout plans implied a 4% merchant fee tradeoff.
Shopify stock delivered $3 billion Q3 revenue with 32% growth, showing sustained merchant activity and rising take rates across payments and value-added services.
The company produced $0.4 billion Q3 net income with operating margins near 16%, reflecting improved cost discipline following earlier margin compression.
Even with a $170 billion market value and 25% revenue growth expectations, SHOP stock trades near 82x earnings, creating tension between execution strength and valuation.
What the Model Says for SHOP Stock
We analyzed Shopify stock’s valuation using operating leverage from merchant scale, payments mix, and profitability improvements translating growth into capital returns.
Based on 25.2% revenue growth, 18.2% operating margins, and an 82.1x exit multiple, the model estimates Shopify reaches $166..
That outcome implies a 20.6% total return, or 10.2% annualized, over roughly 1.9 years to $166.34.
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 revenue expanded from $5 billion in 2022 to $11 billion LTM, showing sustained platform adoption across merchants and payments.
Q3 revenue reached $3 billion with 32% growth, supported by payments penetration, merchant solutions, and rising enterprise adoption.
Growth risks include merchant churn and pricing pressure, while support comes from platform scale and increasing merchant monetization.
According to consensus analyst estimates, 25.2% revenue growth reflects durable commerce expansion balanced against Shopify’s increasing scale and competitive intensity.
2. Operating Margins: 18.2%
Shopify operating margins improved from negative levels in 2022 to 16% recently as cost discipline and scale efficiencies emerged.
LTM operating margins reached nearly 16%, reflecting lower operating expense growth and improved contribution from high-margin merchant services.
Margin risks include reinvestment in commerce features and payments infrastructure, while support comes from operating leverage and stable gross margins.
In line with analyst consensus projections, 18.2% operating margins balance recent recovery with normalization below peak software margin potential.
3. Exit P/E Multiple: 82.1x
Shopify historically traded between roughly 80x and 130x earnings during periods of elevated growth and expanding merchant adoption.
The current valuation reflects optimism around long-term commerce relevance, tempered by sensitivity to growth deceleration.
Multiple risk remains tied to sustained growth execution, while support depends on maintaining premium platform positioning and profitability expansion.
Based on street consensus estimates, an 82.1x exit multiple supports a $166 target and approximately 10.2% annualized returns through 2027.
What Happens If Things Go Better or Worse?
Shopify’s outcomes depend on merchant demand, payments adoption, and cost discipline, setting up a range of possible paths through 2029.
- Low Case: If merchant growth slows and costs rise, revenue grows around 20.4% with margins near 15.3% → 3.7% annualized return.
- Mid Case: With core commerce execution steady, revenue growth near 22.6% and margins improving toward 16.5% → 12.5% annualized return.
- High Case: If payments penetration accelerates and efficiency improves, revenue reaches about 24.9% and margins approach 17.5% → 21.2% annualized return.
The $219.15 mid-case target relies on sustained execution and earnings growth, achievable without multiple expansion or speculative assumptions.
How Much Upside Does It 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.
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!
