For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as 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
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Shopify a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in August 2015 would be worth $42,551.19, or a gain of 4,155.12%, as of August 11, 2025, and this return excludes dividends but includes price increases.
The S&P 500 rose 207.54% and the price of gold increased 194.61% over the same time frame in comparison.
Analysts are forecasting more upside for SHOP too.
Shopify's second-quarter performance benefited from strong growth in its merchant base. New merchant-friendly tools like Shop Minis, Shop Cash, and Sign in with Shop, Shop Pay solutions helped the company to win merchants regularly. Strong adoption of these solutions holds promise for Shopify's prospects. The company's investment in AI-driven tools, such as Catalog, Universal Cart, and Sidekick, helped merchants improve customer engagement and streamline operations. The company also gained traction with large brands like Starbucks and Canada Goose, showcasing its enterprise appeal. An expanding partner base further expanded the company's merchant base. However, Shopify faced gross margin pressure due to higher hosting costs, the return to three-month paid trials, and the expanded PayPal partnership, which carried lower margins.
Shares have gained 33.45% over the past four weeks and there have been 2 higher earnings estimate revisions for fiscal 2025 compared to none lower. The consensus estimate has moved up as well.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Shopify Inc. (SHOP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
