Shopify Inc (SHOP) Stock Forecast & Price Target

Shopify's stock outlook remains positive due to robust growth in its Merchant Solutions revenue, which increased by 38% year-over-year, reaching $2.145 billion, and showcasing the platform's ability to capture additional revenue streams. The company is experiencing significant traction in various segments, particularly with offline GMV rising by 31% year-over-year and B2B GMV skyrocketing by 98% year-over-year, indicating a broadening of its customer base and engagement across different verticals. Additionally, Shopify's international expansion, particularly in Europe, is driving substantial growth, with GMV from this region up 49% year-over-year and contributing 21% to total revenue in the third quarter, further solidifying its position in the global e-commerce market.

The financial performance of Shopify reveals several concerning trends that contribute to a negative outlook. Despite a year-over-year increase in gross profit dollars by 24%, non-GAAP gross margins fell 280 basis points to 49.1%, indicating potential pressures on profitability and competitive pricing challenges. Additionally, the decline in diluted EPS to $0.20, driven by net unrealized losses, alongside decelerating subscription growth from 17% in 2Q25 to 15%, suggests that the firm's revenue streams may be under threat from a combination of heightened competition and shifting market conditions.