What Shopify’s Recent Returns Tell You Right Now

Shopify (NasdaqGS:SHOP) has seen mixed share performance recently, with a small 1 day gain of 0.1%, a flat past week, a roughly 9.4% rise over the past month, and a 21.4% decline over the past 3 months.

Looking beyond the recent pullback, Shopify’s 1 year total shareholder return of 34.2% and 3 year total shareholder return of roughly 3x highlight how past gains contrast with the weaker short term share price momentum around the current US$129.52 level.

If this mixed picture has you comparing opportunities, it could be a good moment to scan our list of 61 profitable AI stocks that aren't just burning cash and see which ones fit your own criteria.

So with Shopify delivering solid revenue and net income growth, plus a 1-year return above 30%, yet trading at a discount to the average analyst price target, is there still an opportunity here or is the market already pricing in future growth?

Most Popular Narrative: 30.6% Undervalued

According to the most followed narrative, Shopify’s fair value sits at $186.64, well above the recent $129.52 close. This sets up a very different picture compared with the recent share pullback.

AI Store Builder + Sidekick features are increasing user engagement and reducing onboarding friction.

Sidekick users doubled from Dec 2024 to May 2025: https://techcrunch.com/2025/05/21/shopify-launches-an-ai-powered-store-builder-as-part-of-its-latest-update/

The narrative asks what kind of growth backdrop would justify that higher fair value and rich future earnings multiple. It focuses on compounding revenue, sturdier margins and a stronger profit profile. The key point is how those elements are combined to support the $186.64 figure.

Result: Fair Value of $186.64 (UNDERVALUED)

However, softer consumer confidence and pressure on smaller US merchants from tariffs could still weigh on Shopify’s revenue and chip away at that valuation gap.

Another way to look at Shopify’s valuation

That $186.64 fair value from the narrative leans on growth and margins, but the earnings multiple paints a tougher picture. At a P/E of 137.2x versus 20.2x for the US IT industry, 33.6x for peers and a 51.9x fair ratio, Shopify carries a lot of expectation in its current price. How comfortable are you with that kind of valuation stretch?

Next Steps

If this has left you torn between opportunity and risk, do not wait around. Check the full picture with 1 key reward and 1 important warning sign and decide where you stand.

Looking for more investment ideas?

If Shopify has you thinking more broadly about your portfolio, do not stop here. Use this momentum to check a few focused ideas while they are still under the radar.

• Target reliability first and scan 67 resilient stocks with low risk scores that can help steady your overall returns when single names feel volatile.
• Hunt for quality at a better price by reviewing our 50 high quality undervalued stocks that pair fundamentals with more modest expectations.
• Broaden your opportunity set by reviewing a screener containing 23 high quality undiscovered gems that most investors are not watching yet.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.