Shopify Stock Forecast: Why Shopify Has Bloated Valuation

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.


  • There’s an ongoing global pandemic and yet Shopify touts a YTD price return of 86.77%. This is in spite of Shopify’s continuing net losses.
  • The rapid ascent of SHOP this year has given it bloated valuation ratios. This goes to show that investors strongly believe in the momentum growth potential of Shopify.
  • Shopify now touts a TTM Price/Valuation ratio of 49.21. This is much higher than Adobe’s 16.31. Adobe is the parent firm of Shopify’s rival, Magento.
  • The super optimism over SHOP is due to its outstanding 5-year revenue CAGR of 69.48%. Profitability will eventually come to Shopify once it reaches peak maturity.
  • Shopify has a healthy balance sheet. Its total cash is $2.36 billion and has no debt. Shopify can therefore a few more quarters of negative levered free cash flow.

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Shopify Stock Forecast: A Real Example on How to Capitalize on Future Retail Trends

This article was written by Michael Shpits, a Financial Analyst at I Know First.


  • Shopify stock saw strong growth from coronavirus lockdowns increasing ecommerce traffic amid decreased brick-and-mortar retail sales.
  • Global retail trends see vast increase in ecommerce sales to the detriment of traditional retail locations both prior to and during the coronavirus pandemic.
  • New tools for merchants including business accounts and debit cards are poised to strengthen Shopify’s market capture.
  • Partnership with Facebook in launching Facebook Shops in position to capitalize on growing online retail trends and Facebook’s resilient growth despite recent revenue issues.
  • Partnership with CoinPayments in bringing crypto payment platform to Shopify merchants set to make crypto payment options easier and more affordable.

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