Shopify (TSX:SHOP) has gotten hammered in current months. The Ottawa-based e-commerce big is roughly 40% beneath its peak, caught in a brutal tech selloff that has left software program shares gasping for air. In line with a current Jefferies notice, roughly 73% of software program shares now display as oversold, the best studying on document.
Let’s see why the continued sell-off in Shopify inventory may very well be a shopping for alternative.
Shopify reported robust Black Friday numbers
Throughout Shopify’s December 2025 investor convention shows, Chief Monetary Officer Jeff Hoffmeister and Head of Investor Relations Carrie Gillard walked by way of 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% yr over yr and 24% on a constant-currency foundation.
Carrie Gillard famous on the UBS International Expertise 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 eternally maintain is the stacking of a number of development drivers which can be all contributing concurrently.
- Worldwide development stays a powerhouse.
- Europe is rising within the excessive 30s to low 40s vary, Gillard shared.
- Progress 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, based on firm disclosures.
- Latest wins embrace Estée Lauder and Canada Goose.
Hoffmeister defined through the Nasdaq Investor Convention that the majority enterprise prospects don’t migrate their total enterprise instantly.
They could begin with simply funds or Store Pay, then step by step develop. This creates a multi-year stacking operate the place every enterprise buyer turns into extra helpful over time.
Cost penetration nonetheless has room to run
Shopify Funds now penetrates 65% of gross merchandise quantity flowing by way of the platform. In North America, that quantity runs a lot larger.
The Canadian tech inventory simply launched funds in 15 extra international locations, principally in Europe. As these markets mature, fee penetration ought to climb, making a pure tailwind to take charges.
Gillard famous that there’s no motive why worldwide markets can’t ultimately 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 working even quicker than that headline quantity suggests.
In enterprise gross sales conversations, Store Pay persistently emerges as a differentiator. Accelerated checkout drives larger conversion charges, which is vital for retailers seeking to flip browsers into consumers.
However Store Pay extends past simply checkout. It connects to the Store app, the place customers can observe 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 that AI brokers will store on behalf of customers.
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 reality.
Hoffmeister emphasised that Shopify is the one firm constructing expertise to assist retailers achieve Agentic commerce, not simply customers.
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 move (FCF) is projected to develop from US$1.60 billion to US$5.81 billion.
If Shopify inventory is priced at 40 instances ahead FCF, which is beneath its one-year common of 77 instances, it ought to acquire 60% over the subsequent three years.
Shopify is 40% beneath its highs, not as a result of the enterprise has failed. It’s down as a result of software program shares received crushed in an indiscriminate selloff.
The corporate has simply doubled Black Friday gross sales in three years, is profitable enterprise offers at a 40% clip, and is completely positioned for the Agentic commerce wave coming.
For traders constructing eternally 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.
Generally one of the best investments come when everybody else is promoting.
