SHOP Gains From Strong Partner Base: Will This Fuel Revenue Growth?

Shopify SHOP is benefiting from its strong partner base, which is playing an important role in driving its revenue growth. In the second quarter of 2025, revenue increased 31.1% year over year to $2.68 billion.

In the second quarter of 2025, Shopify signed deals with iconic brands such as Starbucks, Canada Goose, and Burton Snowboards, showcasing Shopify’s ability to cater to diverse industries. Other notable additions included Michael Kors, Miele, Beachbody, and Signet Jewelers, which reflect Shopify’s rising popularity. In the reported quarter, the Shop App saw 140% year-over-year growth in native GMV, driven by Shop Week, where sales more than doubled compared to last year’s event. Sign-ins through Shop increased 46% due to improved availability and a much smoother user experience.

Shopify’s rich partner ecosystem has been a major growth driver. An expanding partner base, which includes Microsoft, TikTok, Roblox, PayPal, Snap, Pinterest, Criteo, IBM, Cognizant, Alphabet’s cloud computing platform Google Cloud, and Adayen, has expanded its merchant base.

The company is at the forefront of agentic commerce, leveraging AI to transform how consumers discover and shop for products. The company’s investment in AI-driven tools, such as Catalog, Universal Cart, and Sidekick, helped merchants improve customer engagement and streamline operations.

Shopify’s strong partner referral system will continue to boost its merchant base, which will eventually drive top-line growth in 2025 and beyond. For the third quarter of 2025, Shopify expects revenues to grow at a mid-to-high single-digit percentage rate on a year-over-year basis.

SHOP Faces Stiff Competition From MELI and AMZN

Shopify is facing stiff competition in the e-commerce marketplace from companies like MercadoLibre MELI and Amazon AMZN.

MercadoLibre’s rising GMV is acting as a key catalyst. In the second quarter of 2025, MercadoLibre reported GMV of $15.3 billion, which jumped 21% year over year and 37% on a FX-neutral basis. 

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 and Estimates

Shopify shares have risen 34.9% year to date, outperforming the broader Zacks Computer & Technology sector’s return of 21.2%. The Zacks Internet Services industry has returned 29.6% in the same time frame.

SHOP Stock's Performance

SHOP stock is trading at a premium, with a forward 12-month Price/Sales of 14.42X compared with the industry’s 6.45X. SHOP has a Value Score of F.

Price/Sales (F12M)

The consensus mark for 2025 earnings is pegged at $1.44 per share, which has remained unchanged over the past 30 days, suggesting 10.77% year-over-year growth.

Shopify Inc. Price and Consensus

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

SHOP 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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