Shopify (TSX:SHOP) has gotten hammered in latest months. The Ottawa-based e-commerce large 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 latest Jefferies notice, roughly 73% of software program shares now display as oversold, the very best studying on report.
Let’s see why the continued sell-off in Shopify inventory may very well be a shopping for alternative.
Shopify reported sturdy 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 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 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 sturdy.
- The enterprise enterprise continues to scale. Shopify now wins roughly 4 out of 10 enterprise offers, in keeping with firm disclosures.
- Current wins embody Estée Lauder and Canada Goose.
Hoffmeister defined throughout the Nasdaq Investor Convention that almost all enterprise clients don’t migrate their complete enterprise instantly.
They may begin with simply funds or Store Pay, then step by step increase. This creates a multi-year stacking operate the place every enterprise buyer turns into extra useful over time.
Cost 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 larger.
The Canadian tech inventory simply launched funds in 15 extra nations, 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 operating 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 important for retailers seeking to flip browsers into patrons.
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 know-how 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 circulate (FCF) is projected to increase from US$1.60 billion to US$5.81 billion.
If Shopify inventory is priced at 40 occasions ahead FCF, which is beneath its one-year common of 77 occasions, it ought to achieve 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 bought 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 buyers 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 anyplace. The platform is simply too embedded, the service provider ecosystem too sturdy, and the innovation pipeline too deep.
Typically the most effective investments come when everybody else is promoting.
