Shopify Inc. Class A Subordinate Voting Shares (SHOP)

FairStock Score: 47/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses with durable advantages, honest accounting, and a price that leaves room for error. Shopify has real business quality: it provides commerce tools to merchants around the world, and revenue in fiscal Q2 2026, the quarter ended 2026-06-30, was $3.6B, up from $2.7B in fiscal Q2 2025, the quarter ended 2025-06-30. Net income in fiscal Q2 2026, the quarter ended 2026-06-30, was $1.5B and diluted EPS $1.16, a sharp rebound from the fiscal Q1 2026, the quarter ended 2026-03-31, loss of $581.0M and diluted EPS -$0.45. On an annual basis, in fiscal year 2025 (period ended 2025-12-31), revenue was $11.6B versus $8.9B in fiscal year 2024 (period ended 2024-12-31), but net income fell to $1.2B from $2.0B, and diluted EPS dropped to $0.94 from $1.55. That inconsistency matters. The balance sheet is a strength: debt-to-equity is 0.01, and the FairStock-calculated Altman Z-Score of 78.25 is very high. FairStock calculations also show ROE of 15.54%, ROCE of 10.19%, and trailing free cash flow of $2.4B, but that cash flow yields only 1.0% against the $229.1B market cap. At the 2026-10-13 close of $176.52, the FairStock-calculated P/E is 119.27, P/B is 17.94, and EV/EBITDA is 95.16. The Graham Number is $18.10, implying a margin of safety of -875.25%. A Piotroski F-Score of 6/9 is decent, and the computed Lynch category is TURNAROUND because it returned to profit after a loss within three years. The moat may come from switching costs and the merchant ecosystem, but the price already assumes much future success. I prefer a larger discount to intrinsic value and more consistent profits.

In plain English: Shopify sells software that helps businesses build online stores, take payments, manage orders and reach customers. Sales are growing at a good clip, and the company swung back to a large profit in the latest reported quarter, but profits have been uneven and it lost money in the prior quarter. At the recent price, the shares look expensive compared with the company's earnings and cash flow, even though the balance sheet has very little debt.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer