# Shopify (SHOP.TO)

Canonical: https://gigainvestors.com/s/SHOP.TO

Analysis as of: 2026-10-16T07:33:32.514Z. Financial observations: FY2012–FY2025.

Listing currency: CAD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: CAD 252.53 per share; close as of 2026-10-15.

Estimated value: low CAD 25.80 per share, central CAD 34.65 per share, high CAD 39.80 per share. Buy at or below the central value CAD 34.65 per share. Valuation as of 2026-10-16T07:33:32.514Z; scenarios are not confidence intervals.

Expected annual return: 3.9% at the stated quote. About 3.9% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; CA 10-year bond 3.8% + 4 points).

## Checklist

### understandable: fail

- 0 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- negative average operating margin

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 5

- Operating margin variation: 12.40×

Chart: Operating margin; fiscal year observations.

- FY2016: -0.10×

- FY2017: -0.07×

- FY2018: -0.09×

- FY2019: -0.09×

- FY2020: 0.03×

- FY2021: 0.06×

- FY2022: -0.15×

- FY2023: 0.04×

- FY2024: 0.12×

- FY2025: 0.16×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- Recent gross margin fell 5.3pp below the typical margin (limit 4pp)

- ROIC, median of available years: -9.9%

- ROIC, second-lowest year: -67.3%

- Typical minus recent gross margin: 5.3 pp

- Typical gross margin (annual median): 53.2%

- Recent gross margin (lower of latest and 3-year median): 47.9%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.3%

- ROIC including acquisitions, ten-year median: -9.3%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: -178.0%

- FY2017: -65.6%

- FY2018: -67.3%

- FY2019: -27.8%

- FY2020: 14.7%

- FY2021: 6.0%

- FY2022: -23.6%

- FY2023: 3.9%

- FY2024: 14.4%

- FY2025: 21.2%

### economics: fail

- working capital as a share of revenue rose more than 10pp and ends positive

- Owner earnings / net income, 5-yr: 0.94×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $2.7B

- Net income, five-year total: $2.9B

- Return on incremental invested capital: 90.7%

- Working capital / revenue, annual change: 2.0 pp

- Working capital / revenue, change between three-year averages: 15.3 pp

- Working capital / revenue, final three-year average: 18.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.99×

- FY2022: 1.02×

- FY2023: 0.88×

- FY2024: 0.99×

- FY2025: 0.97×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: -67.3% vs 14.4%

- Per-share earnings: -0.04 to 0.96 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 5.3%

- Ordinary dilution, 5-year annual growth: 0.8%

- Market cap gain: $200B

- Cumulative retained earnings: $2.9B

- Diluted shares, 10-year annual growth: 5.3%

- Diluted shares, 5-year annual growth: 0.8%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value change: $1.00

- Per-share value, starting three-year median: -$0.04

- Per-share value, ending three-year median: $0.96

- Buyback history: 0 years

- Debt-funded buybacks: No

- Acquisition spending: $2.3B

- Cumulative net income, 10 years: $2.9B

- ROIC, first three-year median: -67.3%

- ROIC, last three-year median: 14.4%

Chart: Earnings per share; fiscal year observations.

- FY2016: -$0.04

- FY2017: -$0.04

- FY2018: -$0.06

- FY2019: -$0.11

- FY2020: $0.25

- FY2021: $2.32

- FY2022: -$2.72

- FY2023: $0.10

- FY2024: $1.55

- FY2025: $0.96

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -5.4%

- Receivables to sales index (DSRI): 1.08×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 21.7%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.65×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.04×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -10.1%

- FY2017: -4.3%

- FY2018: -3.3%

- FY2019: -5.6%

- FY2020: -1.4%

- FY2021: 18.1%

- FY2022: -30.9%

- FY2023: -7.2%

- FY2024: 2.9%

- FY2025: -5.4%

## Holders

- [Henry Ellenbogen](https://gigainvestors.com/DCP): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Thomas Gayner](https://gigainvestors.com/MKL): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Dan Davidowitz](https://gigainvestors.com/pcm): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 34.8% a year for ten years · sales +32.4%

Story as of 2026-10-16T09:59:56.620Z; price observation 2026-10-15.

Price needs cash profits to grow 34.8% a year for ten years

- 2025-05-08: Shopify Tumbles On Weak Volume Growth From Merchants ([finance.yahoo.com](https://finance.yahoo.com/m/64ac0d10-27c0-3562-89fe-06493441973f/shopify-tumbles-on-weak.html))

- 2025-08-06: Shopify shoots up 22% on consensus-beating third-quarter outlook, Q2 beat ([finance.yahoo.com](https://finance.yahoo.com/news/shopify-rallies-18-consensus-beating-114143666.html))

- 2025-10-06: Why Shopify (SHOP) Is Up 8.1% After Debuting Instant AI Checkout via ChatGPT Integration ([finance.yahoo.com](https://finance.yahoo.com/news/why-shopify-shop-8-1-114100051.html))

- 2025-11-04: Shopify Offers Downbeat Revenue Outlook as Third-Quarter Results Top Views ([finance.yahoo.com](https://finance.yahoo.com/news/shopify-offers-downbeat-revenue-outlook-161855453.html))

- 2026-02-11: Shopify’s Margins Strain Under AI-Driven Growth Push ([finance.yahoo.com](https://finance.yahoo.com/m/009121f9-a75f-3960-8aae-a66a7723155d/shopify%E2%80%99s-margins-strain.html))

- 2026-08-05: Shopify Surges On Earnings Beat, Strong Q3 Revenue Guidance ([finance.yahoo.com](https://finance.yahoo.com/m/d649fff3-8eee-343f-929c-037b83b70924/shopify-surges-on-earnings.html))

### Sales · FY2024–2025

sales +32.4%; source https://www.sec.gov/Archives/edgar/data/1594805/000159480526000007/shop-20251231.htm; observed 2026-02-11.

- FY2016: $389M 

- FY2017: $673M 

- FY2018: $1.1B 

- FY2019: $1.6B 

- FY2020: $2.9B 

- FY2021: $4.6B 

- FY2022: $5.6B 

- FY2023: $7.1B 

- FY2024: $8.9B 

- FY2025: $12B 

### Gross margin · FY2025

gross margin 47.9%; source https://www.sec.gov/Archives/edgar/data/1594805/000159480526000007/shop-20251231.htm; observed 2026-02-11.

- FY2016: 53.8% 

- FY2017: 56.5% 

- FY2018: 55.6% 

- FY2019: 54.9% 

- FY2020: 52.6% 

- FY2021: 53.8% 

- FY2022: 49.2% 

- FY2023: 49.8% 

- FY2024: 50.4% 

- FY2025: 47.9% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in software application; annual sales are USD 11.8 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1594805/000159480526000007/shop-20251231.htm (filed 2026-02-11); FY2025: revenue 11758294000; grossProfit 5629858000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); SHOP.TO: Shopify Inc., a commerce technology company, provides tools to start, scale, market, and run a business of various sizes in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The Company offers Shopify platform that enables merchants to manage products and inventory, process orders and payments, fulfill and ship orders, build customer relationships, source products, leverage analytics, and reporting and access financing for running their business across all of their sales channels, including web and mobile storefronts, physical retail locations, social media storefronts, and marketplaces. It also provides Shopify Payments, a fully integrated payment processing service that allows merchants to accept and process payment cards online and offline. In addition, the company engages in the sale of themes and apps; shipping labels through Shopify Shipping; point-of-sale hardware; advertising on the Shopify App Store; and Shop Campaigns for buyer acquisitions, as well as registration of domain names. The company was formerly known as Jaded Pixel Technologies Inc. and changed its name to Shopify Inc. in November 2011. Shopify Inc. was incorporated in 2004 and is based in Ottawa, Canada.

### Why customers stay

Margins ranged from 47.9% to 50.4% during 2023–25; it lost 9.9% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2023: grossProfit / revenue = 49.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2024: grossProfit / revenue = 50.4%.

- Source: https://www.sec.gov/Archives/edgar/data/1594805/000159480526000007/shop-20251231.htm (filed 2026-02-11); FY2025: grossProfit / revenue = 47.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); 10-year return on capital observations [[2016,-1.7797387403770382],[2017,-0.6560023987296868],[2018,-0.6727079029523748],[2019,-0.2784993581130021],[2020,0.14688018299537625],[2021,0.05961372171232873],[2022,-0.23645933658987753],[2023,0.03880224085202124],[2024,0.14425565497720141],[2025,0.2120260536101925]]; median -0.09882854786892814. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid no dividends in 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2020: growth capex 0; upkeep 41995000; owner earnings 320297635. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2021: growth capex 0; upkeep 50788000; owner earnings 2877090756. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2023: growth capex 0; upkeep 39000000; owner earnings 116200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); FY2024: growth capex 0; upkeep 19000000; owner earnings 1994400000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1594805/000159480526000007/shop-20251231.htm (filed 2026-02-11); FY2025: growth capex 0; upkeep 26455144; owner earnings 1219493856. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); Dividend observations: [[2016,0],[2017,0],[2018,0],[2019,0],[2020,0],[2021,0],[2022,0],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 0.2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); SHOP.TO SharesStats.PercentInsiders = 0.233 percentage points; cache date 2026-10-16.

### What could break it

"Our growth may not be sustainable" (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1594805/000159480526000007/shop-20251231.htm (filed 2026-02-11); Our growth may not be sustainable

### What the price says

The price assumes cash profits grow 34.8% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-11); Ten-year compound average after fade. Initial solved rate 0.5000156770903146. Price 252.53; FX 1.4190435646374344; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share -0.024090784435173672 → FY2025 0.9345115247059176. Closing-price date 2026-10-15.

## Monthly share-price history (CAD per share)

- 2016-10: CAD 5.56 per share

- 2016-11: CAD 5.64 per share

- 2016-12: CAD 5.77 per share

- 2017-01: CAD 6.60 per share

- 2017-02: CAD 7.89 per share

- 2017-03: CAD 9.07 per share

- 2017-04: CAD 10.37 per share

- 2017-05: CAD 12.47 per share

- 2017-06: CAD 11.26 per share

- 2017-07: CAD 11.49 per share

- 2017-08: CAD 13.80 per share

- 2017-09: CAD 14.51 per share

- 2017-10: CAD 12.83 per share

- 2017-11: CAD 13.52 per share

- 2017-12: CAD 12.71 per share

- 2018-01: CAD 15.70 per share

- 2018-02: CAD 17.75 per share

- 2018-03: CAD 16.03 per share

- 2018-04: CAD 17.20 per share

- 2018-05: CAD 19.23 per share

- 2018-06: CAD 19.17 per share

- 2018-07: CAD 18.12 per share

- 2018-08: CAD 18.99 per share

- 2018-09: CAD 21.23 per share

- 2018-10: CAD 18.19 per share

- 2018-11: CAD 20.22 per share

- 2018-12: CAD 18.88 per share

- 2019-01: CAD 22.12 per share

- 2019-02: CAD 24.93 per share

- 2019-03: CAD 27.59 per share

- 2019-04: CAD 32.58 per share

- 2019-05: CAD 37.18 per share

- 2019-06: CAD 39.36 per share

- 2019-07: CAD 41.94 per share

- 2019-08: CAD 51.28 per share

- 2019-09: CAD 41.23 per share

- 2019-10: CAD 41.30 per share

- 2019-11: CAD 44.55 per share

- 2019-12: CAD 51.63 per share

- 2020-01: CAD 61.63 per share

- 2020-02: CAD 62.32 per share

- 2020-03: CAD 58.96 per share

- 2020-04: CAD 88.28 per share

- 2020-05: CAD 104.50 per share

- 2020-06: CAD 128.98 per share

- 2020-07: CAD 136.98 per share

- 2020-08: CAD 139.32 per share

- 2020-09: CAD 136.17 per share

- 2020-10: CAD 122.82 per share

- 2020-11: CAD 139.78 per share

- 2020-12: CAD 143.73 per share

- 2021-01: CAD 139.43 per share

- 2021-02: CAD 164.87 per share

- 2021-03: CAD 138.74 per share

- 2021-04: CAD 145.09 per share

- 2021-05: CAD 148.03 per share

- 2021-06: CAD 181.29 per share

- 2021-07: CAD 187.30 per share

- 2021-08: CAD 192.66 per share

- 2021-09: CAD 171.92 per share

- 2021-10: CAD 180.70 per share

- 2021-11: CAD 194.10 per share

- 2021-12: CAD 174.17 per share

- 2022-01: CAD 122.70 per share

- 2022-02: CAD 87.99 per share

- 2022-03: CAD 84.55 per share

- 2022-04: CAD 54.95 per share

- 2022-05: CAD 47.49 per share

- 2022-06: CAD 40.22 per share

- 2022-07: CAD 44.61 per share

- 2022-08: CAD 41.58 per share

- 2022-09: CAD 37.19 per share

- 2022-10: CAD 46.71 per share

- 2022-11: CAD 55.26 per share

- 2022-12: CAD 47.01 per share

- 2023-01: CAD 65.57 per share

- 2023-02: CAD 56.18 per share

- 2023-03: CAD 64.80 per share

- 2023-04: CAD 65.64 per share

- 2023-05: CAD 77.67 per share

- 2023-06: CAD 85.62 per share

- 2023-07: CAD 89.08 per share

- 2023-08: CAD 89.89 per share

- 2023-09: CAD 74.14 per share

- 2023-10: CAD 65.49 per share

- 2023-11: CAD 98.85 per share

- 2023-12: CAD 103.16 per share

- 2024-01: CAD 107.63 per share

- 2024-02: CAD 103.69 per share

- 2024-03: CAD 104.50 per share

- 2024-04: CAD 96.65 per share

- 2024-05: CAD 80.66 per share

- 2024-06: CAD 90.41 per share

- 2024-07: CAD 84.56 per share

- 2024-08: CAD 99.81 per share

- 2024-09: CAD 108.35 per share

- 2024-10: CAD 108.92 per share

- 2024-11: CAD 161.84 per share

- 2024-12: CAD 152.99 per share

- 2025-01: CAD 169.61 per share

- 2025-02: CAD 162.04 per share

- 2025-03: CAD 136.90 per share

- 2025-04: CAD 131.12 per share

- 2025-05: CAD 146.64 per share

- 2025-06: CAD 157.06 per share

- 2025-07: CAD 169.37 per share

- 2025-08: CAD 193.98 per share

- 2025-09: CAD 206.76 per share

- 2025-10: CAD 243.86 per share

- 2025-11: CAD 223.22 per share

- 2025-12: CAD 221.00 per share

- 2026-01: CAD 178.67 per share

- 2026-02: CAD 164.67 per share

- 2026-03: CAD 165.06 per share

- 2026-04: CAD 164.88 per share

- 2026-05: CAD 164.41 per share

- 2026-06: CAD 162.26 per share

- 2026-07: CAD 164.18 per share

- 2026-08: CAD 204.27 per share

- 2026-09: CAD 210.92 per share

- 2026-10: CAD 251.04 per share

## Annual estimated value (CAD per share)

- FY2023: low CAD 7.06 per share, central CAD 7.80 per share, high CAD 8.23 per share

- FY2024: low CAD 20.17 per share, central CAD 26.34 per share, high CAD 29.93 per share

- FY2025: low CAD 24.04 per share, central CAD 31.77 per share, high CAD 36.27 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:39:18.091Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1594805/000159480526000007/shop-20251231.htm); period 2025-12-31, filed 2026-02-11.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.