Value
2.7/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 0.0 |
| P/S | 1.4 |
| Fwd P/E | 2.2 |
| PEG | 4.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 52.8x
- ▸PEG: 2.57
- ▸Expensive valuation
SHOP · Why this verdict
Why Shopify (SHOP) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Shopify delivers exceptional revenue growth of 34% year-over-year and holds an industry-leading growth rank, but a confirmed death cross, two consecutive earnings misses, and an expensive forward multiple of 48x make the risk-reward unattractive at current price levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Shopify posted 34% year-over-year revenue growth, placing it at the top of its software application peer group on growth, a rate that — if sustained — would justify a premium valuation over a multi-year horizon. Growth breakdown | Revenue growth remains above 25% year-over-year for at least two of the next four reported quarters. | →Stable |
| CounterHigh-growth rates often mean the company is still investing heavily, and the recent EPS miss of negative 290% versus estimates in the most recent quarter suggests profitability remains elusive at this growth pace. | ||
Shopify has missed earnings estimates in two of the last four quarters, including a severe miss of negative 290% in the most recent quarter, creating uncertainty about the company's ability to translate revenue growth into bottom-line results. Earnings | EPS surprise turns positive in at least 3 of the next 4 quarters, demonstrating renewed cost discipline. | →Stable |
| CounterOne quarter of the recent misses involved non-cash or one-time items; underlying operational cash flow trends may be more favorable than GAAP earnings suggest. | ||
A forward price-to-earnings ratio of 48.3x and a PEG ratio of 2.10 leave Shopify vulnerable to multiple compression if growth decelerates or rates remain elevated, with the stock already near the low end of analyst consensus. Valuation breakdown | Forward earnings estimates rise at least 15% over the next 12 months, reducing the effective forward multiple to below 42x without requiring a price decline. | Tripped→Stable |
| CounterAnalysts have a 22-25% upside price target, suggesting the market may re-rate the multiple higher if Shopify demonstrates consistent profitability progress. | ||
The stock is trading below its 200-day moving average with the moving average slope declining at negative 2.8% per month and a confirmed death cross pattern, indicating the primary trend remains bearish. Momentum breakdown | Price rises above the 200-day moving average and holds above it for at least 20 consecutive trading days, signaling trend reversal. | ↓Deteriorating |
| CounterRSI at 57 and improving MACD suggest momentum may be turning; the death cross could resolve quickly if the next earnings report re-rates the stock. | ||
Shopify posted 34% year-over-year revenue growth, placing it at the top of its software application peer group on growth, a rate that — if sustained — would justify a premium valuation over a multi-year horizon.
→StableGrowth breakdown
- Expectation
- Revenue growth remains above 25% year-over-year for at least two of the next four reported quarters.
CounterHigh-growth rates often mean the company is still investing heavily, and the recent EPS miss of negative 290% versus estimates in the most recent quarter suggests profitability remains elusive at this growth pace.
Shopify has missed earnings estimates in two of the last four quarters, including a severe miss of negative 290% in the most recent quarter, creating uncertainty about the company's ability to translate revenue growth into bottom-line results.
→StableEarnings
- Expectation
- EPS surprise turns positive in at least 3 of the next 4 quarters, demonstrating renewed cost discipline.
CounterOne quarter of the recent misses involved non-cash or one-time items; underlying operational cash flow trends may be more favorable than GAAP earnings suggest.
A forward price-to-earnings ratio of 48.3x and a PEG ratio of 2.10 leave Shopify vulnerable to multiple compression if growth decelerates or rates remain elevated, with the stock already near the low end of analyst consensus.
Tripped→StableValuation breakdown
- Expectation
- Forward earnings estimates rise at least 15% over the next 12 months, reducing the effective forward multiple to below 42x without requiring a price decline.
CounterAnalysts have a 22-25% upside price target, suggesting the market may re-rate the multiple higher if Shopify demonstrates consistent profitability progress.
The stock is trading below its 200-day moving average with the moving average slope declining at negative 2.8% per month and a confirmed death cross pattern, indicating the primary trend remains bearish.
↓DeterioratingMomentum breakdown
- Expectation
- Price rises above the 200-day moving average and holds above it for at least 20 consecutive trading days, signaling trend reversal.
CounterRSI at 57 and improving MACD suggest momentum may be turning; the death cross could resolve quickly if the next earnings report re-rates the stock.
Per-dimension breakdown
Quality
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.8 |
| ROA | 6.4 |
| Gross margin | 5.6 |
| Op margin | 6.3 |
| Net margin | 5.4 |
| Current ratio | 6.8 |
| FCF quality | 6.7 |
| Moat | 7.1 |
| Piotroski F | 10.0 |
- ▸Strong Piotroski F-Score: 9/9
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 34% YoY
Momentum
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 0.9 |
- ▸Overbought bear rally (RSI 70)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -3.1%/30d — confirmed downtrend
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.3 |
| Analyst rating | 7.5 |
| Price target | 7.5 |
Insider
5.0/10data confidence 50%Peer rank
5.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.5 |
| quality rank | 5.6 |
| growth rank | 8.6 |
- ▸Industry growth leader
- ▸Conservative debt levels
Technical
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.9 |
| support resistance | 1.8 |
| 52w position | 3.9 |
Risk (lower is worse)
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.1 |
| days to cover | 8.5 |
| volatility | 0.8 |
| put call | 3.9 |
| implied vol | 0.5 |
| max pain risk | 7.0 |
| beta | 1.4 |
| debt equity | 9.9 |
| news risk | 5.5 |
- ▸High IV: 77%
Catalyst
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 5.7 |
| news activity | 8.0 |
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:16d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:4.2<4.5
- ASYMMETRY:0.6<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
0.57
Upside
+8.5%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 70
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 2.58>1.3
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Growth at 10.0; weakest: Technical at 2.5. No conviction either direction.
The strongest dimensions are Growth at 10.0, Quality at 6.5, and Sentiment at 6.5; the weakest are Technical at 2.5, Value at 2.7, and Momentum at 4.2. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 0.57 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Hypergrowth Revenue Trajectory
Trip ifRevenue growth falls below 20% year-over-year in any single reported quarter, suggesting hypergrowth phase is ending.
- P2Earnings Delivery Risk
Trip ifEPS surprise falls below negative 50% in at least 2 of the next 4 quarters, indicating persistent earnings delivery failure.
- P3Death Cross Downtrend
Trip ifStock price drops below $100, more than 11% below current price of $112.49, deepening the confirmed downtrend.
- P4Premium Valuation Compression RiskTripped
Trip ifForward price-to-earnings ratio rises above 60x without a corresponding upward revision to earnings estimates, indicating multiple expansion beyond sustainable levels.