Shopify (TSX:SHOP) has gotten hammered in current months. The Ottawa-based e-commerce big is roughly 40% under its peak, caught in a brutal tech selloff that has left software program shares gasping for air. In line with a current Jefferies word, roughly 73% of software program shares now display screen as oversold, the very best studying on file.
Let’s see why the continued sell-off in Shopify inventory might be a shopping for alternative.
Shopify reported robust Black Friday numbers
Throughout Shopify’s December 2025 investor convention displays, Chief Monetary Officer Jeff Hoffmeister and Head of Investor Relations Carrie Gillard walked by a enterprise that’s firing on a number of cylinders.
Shopify retailers generated US$14.6 billion in gross sales over the Black Friday and Cyber Monday weekend, up 27% 12 months over 12 months and 24% on a constant-currency foundation.
Carrie Gillard famous on the UBS International Know-how and AI Convention that, simply three years in the past, in 2022, Shopify generated US$7.5 billion over the identical weekend. The enterprise has basically doubled in three years.
What makes Shopify compelling as a endlessly maintain is the stacking of a number of development drivers which are all contributing concurrently.
- Worldwide development stays a powerhouse.
- Europe is rising within the excessive 30s to low 40s vary, Gillard shared.
- Development there may be balanced between current and new retailers, suggesting cohorts stay robust.
- The enterprise enterprise continues to scale. Shopify now wins roughly 4 out of 10 enterprise offers, in keeping with firm disclosures.
- Latest wins embody Estée Lauder and Canada Goose.
Hoffmeister defined through the Nasdaq Investor Convention that the majority enterprise clients don’t migrate their whole enterprise instantly.
They may begin with simply funds or Store Pay, then step by step develop. This creates a multi-year stacking perform the place every enterprise buyer turns into extra worthwhile over time.
Fee penetration nonetheless has room to run
Shopify Funds now penetrates 65% of gross merchandise quantity flowing by the platform. In North America, that quantity runs a lot greater.
The Canadian tech inventory simply launched funds in 15 further nations, largely in Europe. As these markets mature, cost penetration ought to climb, making a pure tailwind to take charges.
Gillard famous that there’s no cause why worldwide markets can’t finally attain the identical penetration ranges as North America. That’s years of runway.
The purple Store Pay button is now being utilized in 67% of transactions, and worldwide development is operating even sooner than that headline quantity suggests.
In enterprise gross sales conversations, Store Pay persistently emerges as a differentiator. Accelerated checkout drives greater conversion charges, which is important for retailers trying to flip browsers into patrons.
However Store Pay extends past simply checkout. It connects to the Store app, the place shoppers can monitor orders from a number of Shopify retailers in a single place. Solely Shopify retailers get entry to this ecosystem.
Shopify has additionally positioned itself because the infrastructure layer for Agentic commerce—the concept AI brokers will store on behalf of shoppers.
The corporate constructed its product catalogue greater than two years in the past, particularly for this second. When massive language fashions seek for merchandise, Shopify’s catalogue turns into the authoritative supply of fact.
Hoffmeister emphasised that Shopify is the one firm constructing expertise to assist retailers achieve Agentic commerce, not simply shoppers.
Is Shopify inventory undervalued?
Analysts monitoring Shopify inventory forecast income to develop from US$8.88 billion in 2024 to US$26 billion in 2029. On this interval, free money movement (FCF) is projected to develop from US$1.60 billion to US$5.81 billion.
If Shopify inventory is priced at 40 occasions ahead FCF, which is under its one-year common of 77 occasions, it ought to acquire 60% over the subsequent three years.
Shopify is 40% under its highs, not as a result of the enterprise has failed. It’s down as a result of software program shares acquired crushed in an indiscriminate selloff.
The corporate has simply doubled Black Friday gross sales in three years, is successful enterprise offers at a 40% clip, and is completely positioned for the Agentic commerce wave coming.
For traders constructing endlessly portfolios inside Tax-Free Financial savings Accounts or Registered Retirement Financial savings Plans, this pullback created an entry level. Shopify isn’t going wherever. The platform is simply too embedded, the service provider ecosystem too robust, and the innovation pipeline too deep.
Typically one of the best investments come when everybody else is promoting.
