Shopify - AI Stock Analysis

Analysis generated January 1, 2026

Shopify Inc. (NYSE: SHOP) is a leading e-commerce company that provides a multi-channel, cloud-based commerce platform designed for small and medium-sized businesses. The company enables merchants to design, set up, and manage their stores across various sales channels, including web and mobile storefronts, social media, marketplaces, brick-and-mortar locations, and pop-up shops.

Founded in 2006, Shopify has grown to become a dominant force in the e-commerce industry, empowering over a million businesses worldwide. Shopify's value proposition lies in its ease of use, scalability, and wide array of integrated tools and apps that help merchants efficiently manage their online businesses.

Fundamental Analysis

Shopify reported revenue of $2.84 billion for the last quarter. This represents an increase of 6.12% compared to the previous quarter and a robust year-over-year growth of 31.54%. These figures suggest that Shopify continues to grow its top line healthily, resonating well with its customer base and expanding market reach.

However, the company's net income for the last quarter was $264 million, marking a significant decrease of 70.86% compared to the previous quarter, and a 68.12% drop year-over-year. Such a steep decline in profitability raises concerns about the company's cost management and operational efficiency.

EBITDA stood at $316 million for the last quarter, declining 16.62% compared to the previous quarter and 9.46% year-over-year. This indicates underlying pressures on Shopify's earnings before interest, taxes, depreciation, and amortization, which could be attributed to increasing operational costs or investments in growth initiatives.

With a current P/E ratio of 120.4, Shopify is trading at a high multiple. This could suggest that the stock is overvalued relative to its current earnings, potentially indicating a bearish outlook unless there is strong growth potential to justify such a valuation.

Technical Analysis

As of today, Shopify’s stock price is $160.97, representing an increase of 7.83% in the last month and a significant rise of 49.70% over the past year. Despite this positive short-term and long-term price trend, the overall trend indicated by moving averages is bearish.

The current Simple Moving Average (SMA) over ten days (SMA10) is $167.45, which is lower than the previous SMA10 of $168.32. This suggests potential downward momentum in price movement.

The Relative Strength Index (RSI) is currently at 41.8, falling within the neutral range. An RSI value between 30 and 70 indicates that the stock is neither overbought nor oversold, but given the recent dip in SMA, caution might be warranted.

Alternative Data Analysis

Shopify has 72 open positions listed on various job boards, up by 53% in the last couple of months. This increase in job postings indicates growth and potential expansion, which could signal a positive future outlook for the company.

Employee sentiment about Shopify's business outlook is neutral, suggesting no strong positive or negative internal sentiment that might majorly influence the stock's direction.

Customer acquisition appears to be strong, with 258 million estimated visitors to Shopify’s webpage, up by 16% in the last few months. This bullish trend signals robust customer interest and potential for increased business.

Mobile app usage remains stable, with 18,000 daily downloads. Though no meaningful change is observed, maintaining this level indicates steady user engagement.

On social media, Shopify has 2 million Instagram followers, up by 7% in recent months, indicating growing interest and engagement. However, their Twitter page follows remain static at 440,000.

According to AltIndex’s AI score, Shopify has an AI score of 55, which translates to a hold signal. This AI score considers various data points to provide a holistic view of the stock's potential future performance.

Conclusion

Shopify presents a mixed but intriguing investment case. The company enjoys a solid revenue growth trajectory and robust customer engagement, as evidenced by increased website traffic and social media following. However, declining net income and EBITDA pose risks that might concern potential investors.

From a valuation perspective, the high P/E ratio signals that Shopify is trading at a premium, which might be overvalued at present levels unless the company can demonstrate substantial future growth.

Technically, while the short-term price trend remains positive and RSI is neutral, the bearish trend noted in the moving averages warrants caution.

Based on the AI score, Shopify is a hold. This recommendation aligns with a balanced view of the positives in revenue growth and customer engagement, with caution towards valuation and profitability concerns.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.