$SHOP Due Diligence — Shopify Inc
Buy · 7/10 — full report on Stockato.
- Price: $110.2
- P/E: 112.98
- Market cap: $149.5B
- Revenue (TTM): $12.4B
- Profit margin: 11%
VERDICT: BUY
SCORE: 7/10
CONFIDENCE: MEDIUM — mixed technicals and valuation offset strong growth and analyst support
COMPANY OVERVIEW
Shopify Inc. operates a global commerce platform enabling merchants to build online stores, process payments, and manage operations across channels. Headquartered in Ottawa, it reported $12.37B TTM revenue in the technology/software-application sector, with 2026 Q1 GMV hitting $100.7B.
KEY FUNDAMENTALS
Revenue TTM $12.37B (+34% YoY in Q1); EBITDA $2.15B; operating margin 15.7%; FCF $476M (+31% YoY). PE 113x, forward PE 66x, P/S 12.1x. Analyst consensus: 38 buy/strong-buy, 12 hold, 1 sell; average target $150.11 (+36% upside). Short interest 1.79% of float.
BULL CASE
- Q1 GMV $100.7B (+35% YoY) and revenue $3.17B (+34% YoY) mark strongest growth in over four years; FCF margin reached 15%.
- Management delivered 25%+ pro-forma revenue growth for seven straight quarters while lifting FCF margins from negative to high teens.
- 38 of 51 analysts rate buy/strong-buy with $150.11 target; stock 14% above 20-day SMA.
- Merchant Solutions (76% of revenue) grew 40% YoY, accelerating re-platforming momentum.
BEAR CASE
- Valuation stretched at 113x trailing earnings and 72x P/CF amid confirmed death cross on moving averages.
- Stock already down 5.03% intraday to $110.20; 52-week range position only 18% from lows.
- GAAP net loss of $581M in Q1 and rising SBC dilution flagged by bears.
- Beta 2.38 and low volume (2.4M vs 11.4M avg) amplify downside risk on any macro hiccup.
OPTIONS POSITIONING
Options snapshot is from the last regular session; full positioning will refresh on the next open.
X / SOCIAL CHATTER
Post-Q1 results, bulls highlight record GMV and FCF trajectory: “Revenue up 34% YoY to $3.2B… GMV hit $101B… FCF surged 31% YoY to $476M” (@jzrdan). Another notes “YoY Rev Growth: 35%… rapidly becoming the second most used online shop” (@SchwartzFinance). A data-driven bear counters with “extreme valuation (P/CF 72x, P/E 116x)… Set a limit-buy alert near $94–100” (@_MoarDonuts_). Wall Street targets imply +38% upside per @EmmanuelInvest.
MANAGEMENT CREDIBILITY
Shopify earns a 9/10 credibility score over eight quarters. Guidance was hit or exceeded in nearly every period, with consistent delivery on 25%+ growth plus margin expansion and flat headcount. Minor deduction only for occasional optimistic macro commentary.
KEY CATALYSTS
Q2 earnings (late July/early August); continued GMV re-acceleration; potential AI/agentic commerce updates.
KEY RISKS
Sustained multiple compression if growth slows; macro-driven risk-off rotation given 2.38 beta; $124.6 resistance cap.
BOTTOM LINE
$SHOP offers quality growth at a premium; the 36% analyst upside and proven execution support a buy on weakness to the $94–100 zone, but size positions modestly given valuation and today’s 5% drop.
How SHOP trades
7% below its 52-week high; worst drawdown in the past year 47%.
Moved 11.6% on average (absolute) across the last 8 earnings reports.
Ahead of SPY by 34.7 pts over 3 months.
Trades as a market-like name: β 1.1 to QQQ, 4.5× SPY's volatility.
Realized volatility is 48% over 20 days, calmer than its 1-year 59%.
One-year beta: 1.88 to SPY, 1.06 to QQQ (data-vendor beta 2.62).
Correlation of daily returns: SPY 0.26 (60 days) / 0.42 (1 year); QQQ 0.17 (60 days) / 0.36 (1 year); IWM 0.26 (60 days) / 0.35 (1 year); IGV 0.42 (60 days) / 0.59 (1 year); 10y yield (daily change) -0.32 (60 days) / -0.18 (1 year).
Realized volatility: 48% (20 days), 65% (60 days), 59% (1 year).
Maximum drawdown over the past year -47%; -7% from the 52-week high.
SHOP options and volatility
25-delta puts trade 0.3 vol points below calls in the nearest monthly expiry.
ATM implied vol runs 74% at 1 day to 57% at 190 days (event kink at earnings).
Options price 1.07× the last 20 days' realized volatility.
The first expiry after earnings (2026-11-06, 29 days out) prices ±15.2%, which also covers 29 days of ordinary movement; the average move on earnings day itself has been 11.6%.
Dealers are long gamma; call wall 170.0, put wall 160.0.
Options-implied expected moves: this week (2026-10-09): ±$5.25 (±3.16%); next monthly (2026-10-16): ±$10.01 (±6.03%); earnings expiry (2026-11-06): ±$25.18 (±15.17%).
Options data as of 2026-10-08 07:16 UTC.