SHOP$151.71

Shopify shows strong multi-year top-line expansion, with revenue rising from 5.6bn to 11.6bn and TTM up to 13.3bn, though growth has decelerated from 30.1% in FY2025 to 14.8% TTM. Profitability has improved materially: gross margin has stayed near the high-40s while operating margin expanded from -12.3% in FY2022 to 16.3% in FY2025 and 17.8% TTM. Reported net income is less smooth because other income/expense swung sharply, including a large 2022 hit and a 2025 drag, so structural earnings power is better reflected by normalized net income. Costs remain manageable, but slower growth and some non-operating volatility are the main flags.

Shopify’s balance sheet remains very strong and highly liquid. Total current assets were $8.3 billion in the latest TTM period versus current liabilities of only $1.5 billion, leaving working capital at $6.4 billion. Cash and short-term investments of $4.9 billion comfortably exceed total debt of just $178 million, indicating minimal leverage and ample funding flexibility. Total assets rose to $14.5 billion, while shareholders’ equity stayed robust at $12.7 billion, showing a large equity cushion. The main watch item is rising accounts receivable, which increased to $2.7 billion TTM from $2.4 billion in FY2025, and current assets dipped from FY2025 levels. Even so, liabilities remain well controlled and the equity base is strong and expanding.

Shopify’s cash generation has strengthened materially, with operating cash flow improving from -136 in FY2022 to 2,033 in FY2025 and 2,377 on a trailing basis. Free cash flow followed the same path, rising from -186 to 2,007, which suggests the business is now producing solid cash after modest capital spending of 19 to 26 per year. Cash flow quality is generally good, although working capital swings remain noticeable, including -166 in FY2024 and -117 in FY2025. Net income of 1,231 is below CFO, but not by a concerning margin. Investing cash flow is driven by large securities purchases and sales, while financing outflows in FY2025 and TTM appear controlled rather than aggressive.

Liquidity is exceptionally strong, with current and quick ratios remaining far above 1.0 throughout the period despite some volatility. Cash coverage also stays ample, indicating no short-term funding stress. Leverage is very light: debt-to-equity has declined steadily to near zero, suggesting a conservative balance sheet. Efficiency has improved, as asset turnover rose from 0.52 to 0.92 TTM, showing better use of assets. Profitability also strengthened materially versus FY2022, with operating and net margins turning solidly positive and returns on equity and assets recovering. That said, gross margin has eased slightly and profitability remains below the strongest levels seen in FY2024, so the overall profile is good rather than excellent.

Shopify’s trajectory shows a strong multi-year expansion that continues into the forward estimates, with revenue climbing from 5.60B USD to 8.88B USD and then projected to reach 11.56B USD and 15.23B USD. Growth has accelerated again after the earlier pace in the mid-20% range, suggesting sustained operating momentum rather than a near-term slowdown. EPS has been more uneven, moving from a loss to positive results, then dipping before rebounding to 1.91 and 2.45, which indicates improving profitability but not a perfectly smooth margin path. Analyst sentiment is constructive: a Buy consensus from 47 analysts, a 175 median target, and a recommendation mix that has edged more positive, with Strong Buy and Buy counts rising while Hold stays stable and Sell remains minimal.