Home / Business and Economy / Shopify Stock Reaches New Peak, But What's Behind It?
Shopify Stock Reaches New Peak, But What's Behind It?
14 Oct
Summary
- Shopify stock hit a record close on Monday, nearly a year after its last peak.
- Revenue grew about a third, with profits rising even faster in the past year.
- Despite strong business growth, the stock is still considered expensive by analysts.
Shopify's stock closed at $179.22 on Monday, its first record close in nearly a year. This level is similar to its previous high of $179.01 on October 29, 2025. Between these two points, the stock experienced significant volatility, falling by nearly half before recovering.
The recent surge appears to be influenced by positive commentary on AI shopping agents, which are seeing triple the order volume year-over-year. However, Shopify's management notes this channel still represents a small portion of overall sales.
More substantial are the company's financial results. In the 12 months ending June 2026, revenue was approximately $13.3 billion, a third higher than the previous year, with growth consistently above 30%. Profits have seen even stronger gains, with second-quarter operating income up 68% and free cash flow rising 55%.
Valuation metrics suggest the stock is cheaper than at its last record, with its market cap now 98 times trailing-12-month free cash flow, down from 128 times. However, this valuation still implies significant future growth. Management anticipates third-quarter gross profit growth in the mid-to-high 20s, slower than revenue growth due to the increasing contribution of lower-margin payments. Consequently, the stock may still be considered too expensive by some analysts.
