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SHOP Soars 8.4% in a Month: Can Growing Merchant Base Fuel More Gains?
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Key Takeaways
Shopify rose 8.4% in a month, outpacing its sector on strong growth in merchant tools and user adoption.
Shop Pay processed $22B in GMV, up 57%, with major brands adopting the tool and new USDC payment integration.
SHOP's partner network, including TikTok, Roblox, and Google Cloud, is boosting merchant reach and innovation.
Shopify (SHOP - Free Report) shares have gained 8.4% over the past month compared with the broader Zacks Computer & Technology sector’s increase of 4.8%. The Zacks Internet - Services industry has declined 0.9% in the same time frame.
The outperformance can be attributed to robust growth in its merchant base driven by its merchant-friendly tools, including Shop Pay, Shopify Pay Instalments, Sign in with Shop and the Shop App. The strong adoption of these solutions holds promise for Shopify’s prospects.
In the first quarter of 2025, Merchant Solutions’ revenues were $1.74 billion and accounted for 73.7% of Shopify’s total revenues. On a year-over-year basis, merchant revenues increased 29%, driven by strong Gross Merchandise Volume (GMV) and increased penetration of Shopify payments.
GMV in the first quarter of 2025 was $74.75 billion, which increased 22.8% year over year. Same-store sales growth from existing merchants, a higher number of merchants on SHOP’s platform and strong international growth drove GMV in the reported quarter.
SHOP Stock Performance
Image Source: Zacks Investment Research
SHOP Benefits From an Expanding Portfolio
SHOP’s expanding portfolio has been a major growth driver for its success. Its merchant-friendly tool Shop Pay stands out as a key driver. The app processed $22 billion in Gross Merchandise Value in the first quarter of 2025, up 57% year over year. Large brands like Birkenstock, Lilly Pulitzer, and Johnny Was adopted Shop Pay, enhancing Shopify’s portfolio.
Further expanding its portfolio Shopify recently partnered with Coinbase and Stripe to enable merchants worldwide to accept USDC stablecoin payments through Shopify Payments. This integration offers fast, borderless transactions on the Base network, with no added fees and seamless checkout experiences.
Shopify’s investment in AI-driven tools, such as Shopify Sidekick, tariffguide.ai and Shop Inbox, is helping merchants improve customer engagement and streamline operations. By using AI, Shopify enhances its platform’s power and user-friendliness.
A Rich Partner Base Aids SHOP’s Prospects
Shopify’s rich partner ecosystem has been a major growth driver. An expanding partner base, which includes TikTok, Roblox, PayPal, Snap, Pinterest, Criteo, IBM, Cognizant (CTSH - Free Report) , Alphabet’s (GOOGL - Free Report) cloud computing platform Google Cloud and Adayen, has further expanded its merchant base.
SHOP’s partnership with Cognizant and Alphabet’s Google Cloud aims to help retailers modernize their commerce platforms and deliver personalized, real-time shopping experiences. Combining Shopify’s platform, Alphabet’s cloud computing platform Google’s cloud technology, and Cognizant’s expertise, this partnership supports retailers in scaling globally and unlocking new business value through advanced technologies like generative AI.
In its commerce integration partnership with Roblox, Shopify has opened new avenues for merchants to reach a younger and more engaged audience. This collaboration with Roblox allows Shopify to strengthen its position in the digital commerce space.
SHOP Suffers From Stiff Competition
Shopify is facing stiff competition in the e-commerce marketplace against the likes of Alibaba (BABA - Free Report) and Amazon.
Alibaba’s ecosystem approach provides multiple revenue streams and cross-selling opportunities. Customer management revenues at Taobao and Tmall grew 12% year over year in fourth quarter fiscal 2025, reflecting improved monetization and merchant engagement.
In 2025, Alibaba announced that Taobao and Tmall Group have strengthened their partnership with lifestyle content platform Xiaohongshu, enabling merchants to embed product links from their Taobao and Tmall stores directly into Xiaohongshu content posts.
SHOP’s 2025 Earnings Estimates Revisions Are Steady
The Zacks Consensus Estimate for SHOP’s 2025 earnings is currently pegged at $1.40 per share, which has remained unchanged over the past 30 days, indicates year-over-year growth of 7.69%.
The consensus mark for SHOP’s 2025 revenues is currently pegged at $10.86 billion, indicating year-over-year growth of 22.27%.
SHOP stock is currently overvalued, as the Value Score of F suggests a stretched valuation at this moment.
The stock is trading at a premium, with a forward 12-month Price/Sales of 12.05X compared with the Internet - Services industry’s 4.98X.
Price/Sales (F12M)
Image Source: Zacks Investment Research
Conclusion: Hold SHOP Stock For Now
SHOP is benefiting from strong growth in its merchant base and expanding footprint. Its focus on improving its client base is a key catalyst. Hence, investors who already own the stock may expect the company’s growth prospects to be rewarding over the long term.
However, stiff competition, challenging macroeconomic uncertainties, persistent inflation and cautious consumer spending are headwinds. Tariff uncertainties, along with stretched valuation remains a concern.
Image: Bigstock
SHOP Soars 8.4% in a Month: Can Growing Merchant Base Fuel More Gains?
Key Takeaways
Shopify (SHOP - Free Report) shares have gained 8.4% over the past month compared with the broader Zacks Computer & Technology sector’s increase of 4.8%. The Zacks Internet - Services industry has declined 0.9% in the same time frame.
The outperformance can be attributed to robust growth in its merchant base driven by its merchant-friendly tools, including Shop Pay, Shopify Pay Instalments, Sign in with Shop and the Shop App. The strong adoption of these solutions holds promise for Shopify’s prospects.
In the first quarter of 2025, Merchant Solutions’ revenues were $1.74 billion and accounted for 73.7% of Shopify’s total revenues. On a year-over-year basis, merchant revenues increased 29%, driven by strong Gross Merchandise Volume (GMV) and increased penetration of Shopify payments.
GMV in the first quarter of 2025 was $74.75 billion, which increased 22.8% year over year. Same-store sales growth from existing merchants, a higher number of merchants on SHOP’s platform and strong international growth drove GMV in the reported quarter.
SHOP Stock Performance
Image Source: Zacks Investment Research
SHOP Benefits From an Expanding Portfolio
SHOP’s expanding portfolio has been a major growth driver for its success. Its merchant-friendly tool Shop Pay stands out as a key driver. The app processed $22 billion in Gross Merchandise Value in the first quarter of 2025, up 57% year over year. Large brands like Birkenstock, Lilly Pulitzer, and Johnny Was adopted Shop Pay, enhancing Shopify’s portfolio.
Further expanding its portfolio Shopify recently partnered with Coinbase and Stripe to enable merchants worldwide to accept USDC stablecoin payments through Shopify Payments. This integration offers fast, borderless transactions on the Base network, with no added fees and seamless checkout experiences.
Shopify’s investment in AI-driven tools, such as Shopify Sidekick, tariffguide.ai and Shop Inbox, is helping merchants improve customer engagement and streamline operations. By using AI, Shopify enhances its platform’s power and user-friendliness.
A Rich Partner Base Aids SHOP’s Prospects
Shopify’s rich partner ecosystem has been a major growth driver. An expanding partner base, which includes TikTok, Roblox, PayPal, Snap, Pinterest, Criteo, IBM, Cognizant (CTSH - Free Report) , Alphabet’s (GOOGL - Free Report) cloud computing platform Google Cloud and Adayen, has further expanded its merchant base.
SHOP’s partnership with Cognizant and Alphabet’s Google Cloud aims to help retailers modernize their commerce platforms and deliver personalized, real-time shopping experiences. Combining Shopify’s platform, Alphabet’s cloud computing platform Google’s cloud technology, and Cognizant’s expertise, this partnership supports retailers in scaling globally and unlocking new business value through advanced technologies like generative AI.
In its commerce integration partnership with Roblox, Shopify has opened new avenues for merchants to reach a younger and more engaged audience. This collaboration with Roblox allows Shopify to strengthen its position in the digital commerce space.
SHOP Suffers From Stiff Competition
Shopify is facing stiff competition in the e-commerce marketplace against the likes of Alibaba (BABA - Free Report) and Amazon.
Alibaba’s ecosystem approach provides multiple revenue streams and cross-selling opportunities. Customer management revenues at Taobao and Tmall grew 12% year over year in fourth quarter fiscal 2025, reflecting improved monetization and merchant engagement.
In 2025, Alibaba announced that Taobao and Tmall Group have strengthened their partnership with lifestyle content platform Xiaohongshu, enabling merchants to embed product links from their Taobao and Tmall stores directly into Xiaohongshu content posts.
SHOP’s 2025 Earnings Estimates Revisions Are Steady
The Zacks Consensus Estimate for SHOP’s 2025 earnings is currently pegged at $1.40 per share, which has remained unchanged over the past 30 days, indicates year-over-year growth of 7.69%.
The consensus mark for SHOP’s 2025 revenues is currently pegged at $10.86 billion, indicating year-over-year growth of 22.27%.
Shopify Inc. Price and Consensus
Shopify Inc. price-consensus-chart | Shopify Inc. Quote
SHOP Stock Overvalued
SHOP stock is currently overvalued, as the Value Score of F suggests a stretched valuation at this moment.
The stock is trading at a premium, with a forward 12-month Price/Sales of 12.05X compared with the Internet - Services industry’s 4.98X.
Price/Sales (F12M)
Image Source: Zacks Investment Research
Conclusion: Hold SHOP Stock For Now
SHOP is benefiting from strong growth in its merchant base and expanding footprint. Its focus on improving its client base is a key catalyst. Hence, investors who already own the stock may expect the company’s growth prospects to be rewarding over the long term.
However, stiff competition, challenging macroeconomic uncertainties, persistent inflation and cautious consumer spending are headwinds. Tariff uncertainties, along with stretched valuation remains a concern.
Shopify currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a more favorable time to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.