Shopify Inc (SHOP) Stock Forecast & Price Target

Shopify's stock outlook is bolstered by strong financial metrics, evidenced by a 38% year-over-year growth in Merchant Solutions revenue, which reached $2.145 billion, surpassing expectations. Additionally, payment volumes constituted 65% of the Gross Merchandise Volume (GMV) this quarter, demonstrating a successful global adoption of Shopify Payments, which grew by 67% year-over-year. The company is also seeing substantial growth across various segments, particularly in Europe, where GMV surged 49% year-over-year, contributing to an increased revenue forecast for 2025 and 2026, reflecting the platform's expanding market presence and potential.

The financial analysis indicates a negative outlook for Shopify, largely due to decelerating subscription growth, which fell from 17% in Q2 2025 to 15%, attributed to challenging year-over-year comparisons and changes in pricing and packaging. Additionally, despite a modest increase in adjusted operating margins to 16.4% and positive cash flow results, the diluted EPS of $0.20 significantly underperformed compared to both estimates and the previous year's figures, spotlighting the impact of net unrealized losses on equity and other investments. Furthermore, while gross profit dollars increased by 24% year-over-year, the non-GAAP gross margins declined 280 basis points to 49.1%, slightly missing consensus expectations, highlighting potential ongoing pressure on profitability amidst a shifting financial landscape.