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Shopify (SHOP) stock is trending higher, rising 24% in one month and nearly 72% in the last six months. This solid uptrend in Shopify stock, which provides internet infrastructure for e-commerce, reflects the ongoing strength in its business, led by solid demand for its platform and products.
The company’s recent fourth-quarter (Q4) financial report further bolstered investor confidence. Shopify’s performance included a 24% year-over-year increase in gross merchandise volume (GMV) during Q4, marking its best quarter since the peak pandemic period of Q4 2021. This growth reflects a surge in same-store sales from existing merchants, mainly Shopify Plus clients, alongside a notable expansion in merchants using its platform. International markets also showed strength, with GMV outside North America climbing 33% in the same quarter.
Shopify has consistently delivered impressive financial metrics. It achieved seven consecutive quarters of pro forma revenue growth exceeding 25%, sustained GMV growth rates above 20% for six consecutive quarters, maintained positive free cash flow for nine straight quarters, and had double-digit margins for six consecutive quarters.
What makes Shopify’s growth even more compelling is its ability to scale across multiple products, geographies, and merchant segments.
Looking at its 2024 performance, Shopify came close to reaching $300 billion in GMV while generating an impressive $9 billion in revenue. That’s nearly 2.5 times its GMV and three times its revenue compared to 2020 — an extraordinary leap in just four years. With annual revenue growth of 26% in 2024 and an 18% free cash flow margin, Shopify isn’t just growing, it’s becoming more profitable as it scales.
As Shopify continues to deliver strong growth, at least one analyst is betting big on Shopify and expects SHOP stock to hit $175, reflecting potential upside of 38% from its closing price on Feb. 14.
With substantial revenue and expanding margins, Shopify stock certainly has momentum. But will it reach $175 by the end 2025 or fall short? Let’s find out.
Here’s What Will Push Shopify Stock Higher
Shopify is solidifying its dominance in the e-commerce space through continued investments in key areas. The company is strengthening its core platform while aggressively pushing into high-growth segments like enterprise, offline retail, and international markets.
One of Shopify’s biggest success stories has been its international expansion, with two consecutive years of growth exceeding 30%. This global push is driving significant top-line growth as Shopify establishes itself in more markets and scales its operations worldwide.
Beyond e-commerce, Shopify is making significant strides in offline retail. In 2024, revenue from its offline segment grew 33% to $588 million, surpassing $100 billion in cumulative gross merchandise volume (GMV) processed.
In the B2B segment, the company is seeing explosive demand, with six consecutive quarters of over 100% year-over-year GMV growth. In Q4 alone, B2B GMV surged by 132%, with full-year growth exceeding 140% compared to 2023.
It's focusing on becoming the go-to platform for businesses looking to establish an online presence. By doubling down on initiatives such as point-of-sale solutions, B2B services, and enhanced marketing strategies, Shopify continues to strengthen its competitive positioning. The company is actively investing in expanding its merchant base, including high-volume global brands, while growing its footprint in emerging verticals.
Additionally, Shopify is forming strategic partnerships to broaden its ecosystem. Shopify became Roblox’s (RBLX) first commerce partner. Moreover, it integrated its platform with Alphabet’s (GOOGL) YouTube Shopping in the U.S. Further, it expanded its payments offering through collaboration with PayPal (PYPL) and introduced its first AI-powered search integration with Perplexity. These strategic moves are designed to strengthen its ecosystem and capture a larger e-commerce market share.
Further, Shopify’s focus on improving efficiency provides the flexibility to reinvest in high-growth opportunities without sacrificing profitability.
Shopify Stock: A Compelling Investment Opportunity
Overall, Shopify is on a strong growth trajectory. However, not all analysts endorse SHOP stock, given the recent growth in its value. Currently, the consensus rating on Shopify stock remains “Moderate Buy,” reflecting optimism and concerns about its valuation.
That said, Shopify’s diverse and expanding ecosystem presents significant long-term potential. With a growing addressable market spanning online, B2B, offline, and international segments, Shopify is well-positioned for continued growth. Furthermore, Shopify’s strategic initiatives, including advancements in artificial intelligence (AI) and payment solutions, reinforce its competitive edge. As Shopify continues to innovate, expand its product offerings, and capture new markets, the path to hit $175 appears attainable.
