Shopify stock prices performed well in 2024, as the company’s business growth continued throughout the year. The stock price jumped over 40% in the past year and outperformed the Nasdaq100 index as well as the S&P 500. Is it a good idea to purchase SHOP shares now that the stock is hovering at a two-year high level?
Shopify is a successful business.
Shopify is the largest player in the industry of e-commerce and software. It’s doing very well thanks to strong spending levels and ecosystem expansion.
Last year’s financial reports showed that Shopify’s Gross Merchandise Value (GMV), and its revenue, both grew by double digits. Shopify has grown significantly since its establishment in 2006.
Shopify’s business has grown over the years. Shopify has expanded its business over the years.
The company is now considered a fintech, and its payment solutions offer GPV in excess of $43 billion. This represents a 31 percent annual growth. The Shop Pay service, which allows users to purchase and pay online for products or services, was the main driver of this growth.
Shopify PoS is also part of Shopify Payment Solutions. This solution allows retail partners to take payments. The service is now available in other countries, such as the UK and Australia. This is a solution that thousands of businesses use around the world.
Shopify continues to add more businesses onto its platform. Reebok is one of the more notable firms. Others include Shoe Carnival Off-White Hanes and Lionsgate. The future growth of this company will be muted as most businesses already use a service provider.
Shopify generated $2.2 billion of revenue in its third quarter. This is a 26 percent increase over the previous year. Shopify’s merchant and subscription solution grew 26%, to $610 and $1.6 billion respectively.
Profitability has increased for the company, as operating income has risen to $283 millions and cash flows to $421million.
Share price of Shopify could rise 30% following earnings
SHOP will continue to grow
Analysts predict that Shopify will continue to grow in the future. This quarter, the average revenue growth is 27 percent to $2.73 Billion. Analysts predict that revenue will grow 24.45% to $2.32 Billion in the coming quarter.
These numbers indicate that the company’s revenue will increase by 24,5% this year to $8.79 Billion, and then by 22% in 2025, to $10.78 Billion.
This may justify the high price. SHOP has a market capitalization of over $142 Billion, which gives it a P/E forward ratio of 83. This is higher than the median for its sector of 25.6. The GAAP P/E of 104, which is higher than the average company including Nvidia, also makes it stand out.
Shopify has a revenue increase of 24% and a net profit margin of 16. This gives it the rule of 40 out of 40. This is an indication that Shopify isn’t all that costly, since its revenue growth is balanced with its profitability.
Stock price analysis by Shopify
TradingView SHOP Chart
Weekly chart showing SHOP’s share price at its lowest point of $23 was in 2022. It has since soared to $120. The price has moved up above the purple ascending channel.
Stocks have also increased above $100, a psychologically significant level. They are still above both the 100-week and 50-week moving averages.
While oscillators such as the Relative Strength Index and MACD continue to rise, the stock price has also continued to increase. The stock is therefore bullish. In 2025, $175.70 will be the all-time highest level, which is approximately 60% higher than the current price.
The post Shopify Stock Forecast 2025: Shop is not overvalued as much may change with updates.
