- SHOP
- META
Shopify (NasdaqGS:SHOP) moved back into focus after Meta’s Muse AI agent gained the ability to browse Shopify-powered stores and complete purchases through Shop Pay across all merchants on the platform.
The Muse announcement arrived after a choppy spell for Shopify, with the share price down 6% year to date and the 1 month share price return slightly negative. However, the stock has recently regained momentum, with a 7 day share price return of 13.8% and a 90 day share price return of 29.4%. Investors are balancing that short term rebound against a more mixed picture, where the 1 year total shareholder return is slightly negative while the 3 year total shareholder return is very large and the 5 year total shareholder return is positive but far more modest. This suggests that views on Shopify’s long term growth potential and risk profile are still in flux around the current US$147.74 share price.
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After a sharp jump on the Muse news and a long run of big multi year gains, the live question is whether Shopify still offers meaningful upside or if most of the easy money is already behind the stock.
Most Popular Narrative: 30% Undervalued
According to QuanD, the most followed narrative puts Shopify’s fair value at $210.47, which sits well above the recent $147.74 close and frames the current price as a discount rather than a peak.
I’ve owned Shopify for many years, and my conviction originally came from seeing the product work in the real world.
While working at an agency, one of our clients migrated their business to Shopify. What stood out wasn’t simply how easy it was to build the store. It was how seamlessly the business could grow afterwards.
See why 3 investors see Shopify as 30% undervalued.
This narrative rests on Shopify’s role as commerce infrastructure. The business handles hosting, payments, transaction security and other heavy lifting in the background, while merchants plug into a wide app and integration ecosystem that lets them tailor how they sell.
QuanD’s view also ties the valuation directly to merchant activity. With roughly 78% of revenue coming from Merchant Solutions rather than subscriptions, the thesis is that Shopify participates in the economic activity flowing across the platform instead of relying mainly on price hikes or constant new customer additions.
Even within that framework, valuation risk is front and center in the narrative. The author describes Shopify as far from cheap at current levels and flags that the story is not about a quick doubling over the next year. This is despite annual revenue growth running around 20.2% and earnings growth running 18.1% per year over the past 5 years.
