For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Shopify (SHOP) ten years ago? It may not have been easy to hold on to SHOP for all that time, but if you did, how much would your investment be worth today?
Shopify's Business In-Depth
With that in mind, let's take a look at Shopify's main business drivers.
Ottawa, Canada-based Shopify Inc. is a leading global commerce platform that helps in starting, scaling, marketing, and running a business of any size. Its platform and services are engineered for simplicity and reliability, while delivering a better shopping experience for customers everywhere.
Merchants use the company’s software to run business across various sales channels, including web and mobile storefronts, physical retail locations, social media storefronts, and marketplaces.
Shopify Dashboard, which is available in more than 20 languages, enables merchants to manage products and inventory, process orders and payments, ship orders, build customer relationships and leverage analytics along with reporting from one integrated back office.
Moreover, Shopify hosts a huge database of merchant and customer interactions. Merchants leverage this transactional dataset to get meaningful insight into the sales channel growth prospects and consumer behavioral aspects. This improves their ability to target prospective customers more easily, which drives sales growth.
Apart from the company’s own payment solution, payment wallets like Apple Pay, Meta Pay, Amazon Pay and Google Pay is also available to the merchants, which they offer to customers for completing transaction done on the Shopify platform.
In 2024, revenues came in at $8.88 billion. The company generates revenues from two sources: Subscriptions Solutions (26.5% of 2024 revenues) and Merchant Solutions (73.5%). As of Dec. 31, 2024, more than 16,000 apps were available in the Shopify App Store.
Subscription revenue is recognized on a ratable basis over the contractual term. The terms range from monthly, annual or multi-year subscription terms. The company earns revenue based on the services it delivers either directly to merchants or indirectly through resellers.
Shopify generates the majority of merchant solutions revenue from fees that it charges merchants on their customer orders processed through Shopify Payments.
The company also derives merchant solutions revenue relating to Shopify Shipping, Shopify Capital, other transaction services and referral fees, as well as from the sale of Point-of-Sale (POS) hardware.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Shopify, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in July 2015 would be worth $37,875.00, or a gain of 3,687.50%, as of July 14, 2025, according to our calculations. This return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 201.44% and gold's return of 179.16% over the same time frame.
Analysts are anticipating more upside for SHOP.
Shopify is benefiting from strong growth in its merchant base. New merchant-friendly tools like Shopify Balance, Shopify Tax, Shopify Inbox, and Tap to Pay solutions are helping the company to win new merchants regularly. Strong adoption of these solutions holds promise for Shopify's prospects. The company's investment in AI-driven tools, such as Shopify Sidekick and tariffguide.ai, is helping merchants improve customer engagement and streamline operations. Expansion of back-office merchant solutions to more countries is also strengthening Shopify's international footprint. An expanding partner base is further expanding the company's merchant base. However, challenging macroeconomic uncertainties, persistent inflation and cautious consumer spending are headwinds. Ongoing tariff uncertainties also remained a concern.
The stock is up 6.43% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2025. The consensus estimate has moved up as well.
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Shopify Inc. (SHOP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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