Shopify's GMV Rides on Growing Merchant Base: Sign of More Upside?

Shopify’s SHOP second-quarter 2025 Gross Merchandise Volume (GMV) increased 30.6% year over year to $87.84 billion. Offline GMV rose 29% year over year while B2B GMV jumped 101%. International GMV grew 42% year over year, with Europe’s GMV rallying 42% year over year (49% on a constant-currency basis).

Same-store sales growth from existing merchants, a higher number of merchants on SHOP’s platform, and strong growth in Europe drove GMV in the reported quarter. Shopify Payments’ GMV penetration hit 64% in the second quarter of 2025. The expansion of payment product into more countries,16 launched till the end of the second quarter, drove GMV. Shop Pay GMV increased 65% year over year, and it processed $27 billion in GMV. Shop App native GMV jumped 140% year over year.

Shopify’s expanding portfolio for merchants has been a game-changer. The company launched a catalog in the second quarter of 2025 to give AI partners and shopping apps real-time access to millions of products from its global merchant network. Shopify’s new and improved Checkout Kit is already being used by Microsoft Copilot. Sidekick is gaining traction among merchants as the solutions’ data analysis capability helps merchants address strategic business decisions.

New merchant-friendly tools like Shop Minis, Shop Cash, Sign in with Shop, and Shop Pay solutions are helping Shopify win merchants regularly. Strong adoption of these solutions holds promise for Shopify’s prospects. The Zacks Consensus Estimate for third-quarter 2025 Merchant solutions revenues is pegged at $2.03 billion, indicating 31% growth from the figure reported in the year-ago quarter.

Tough Competition Hurts SHOP’s Prospects

Shopify is facing stiff competition in the e-commerce marketplace from the likes of eBay EBAY and Amazon AMZN.

eBAY is benefiting from strong advertising growth and solid GMV expansion. Focus category GMV rose more than 10% in the second quarter of 2025, outpacing core categories, with all focus areas accelerating year over year. Collectibles led the growth, as trading card GMV rose for the 10th straight quarter, driven by continued strength in sports and collectible card games. Active buyers moved up 1% year over year to 134 million, while enthusiast buyers held steady at 16 million. The use of Generative AI in ad listings has increased quality scores, rankings and GMV.

Amazon’s “Buy with Prime,” which combines its payments and fulfillment services and makes them available at checkout on other websites, and promises faster delivery for Prime members, intensifies competition for Shopify. In the second quarter of 2025, Amazon set a global speed record for Prime deliveries, with 30% more items delivered same day or next day than the previous year.

SHOP’s Share Price Performance, Valuation & Estimates

Shopify shares have jumped 30.8% year to date, outperforming the broader Zacks Computer and Technology sector’s return of 12.9% and the Zacks Internet Services industry’s appreciation of 13.3%.

SHOP Stock’s Performance

Shopify stock is overvalued, with a forward 12-month price/sales of 14.14X compared with the broader sector’s 6.52X. SHOP has a Value Score of F.

SHOP Valuation

The Zacks Consensus Estimate for 2025 earnings is pegged at $1.44 per share, up by four cents over the past 30 days, suggesting 10.8% year-over-year growth.

Shopify Inc. Price and Consensus

 

Shopify Inc. price-consensus-chart | Shopify Inc. Quote

Shopify currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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