Shopify Stock Has Come Back From the Dead: Too Late to Buy?

Shopify is up but could have more room to run.

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After hitting a bottom in late-2022, Shopify Inc. (TSX:SHOP)(NYSE:SHOP) has rebounded at a ferocious pace. The tech stock is up 80% since October. It’s now trading at $63.80, roughly the same price it was at in early 2022. 

Investors are wondering if the stock has more room to run or if the company’s growth potential is now fully priced-in. Here’s a closer look at the fundamentals and outlook for this e-commerce giant. 


Shopify’s growth has undoubtedly slowed down. The pandemic and lockdown accelerated online shopping like never before. That boom is now over. Not only are physical stores open again, but consumers have less money to spend as they get squeezed by inflation and stagnant wages. 

Unsurprisingly, Shopify’s growth has slowed down. The company registered 41% revenue growth year over year in the last quarter of 2021. In the same quarter of 2022, revenue growth was up only 28%. 

If the global economy enters a recession, as many experts expect, growth could slow down further. 


“There is elevated inflation and continued caution around consumer spending due to a variety of macroeconomic factors,” the Shopify team said in their latest earnings report. However, inflation and macroeconomic factors have moderated in recent months. 

Canada’s official rate of inflation has been declining consistently since June last year. The Consumer Price Index (CPI) was up 4.3% in March. The central bank expects this rate to hit 3% sometime this year and probably approach 2% by the end of next year. That’s good news for consumers. 

Meanwhile, Canada’s unemployment rate was 5% in March – just slightly higher than the record low of 4.9%. Wages are growing, too. The Bank of Canada expects the average wage of a Canadian worker to rise 4% in 2023, which means people’s incomes could actually exceed inflation in some months this year. 

These positive trends could be derailed by a sudden recession or spike in unemployment. However, if they play out as expected Shopify could be in for better-than-expected growth. Consumers may have more money to shop by Christmas, which is the most important season in retail. 


Investors may have priced-in this slower pace of growth. Shopify stock is up 80% over the past seven months but it’s still trading 70% below its all-time high. 

At the moment, Shopify stock trades at an enterprise value (EV)-to-revenue ratio of 9.5. That ratio reached as high as 42 during the tech boom in 2021. So Shopify stock is cheaper than it used to be, but still not cheap given its pace of expansion. 

Meanwhile, the company has announced layoffs, which could reduce its cost of operations. If the company can swing back to profitability this year, the current valuation would be entirely justified. 

Bottom line

Shopify stock is up 80% but it may have more room to run if inflation continues to moderate and consumer sentiment recovers in time for Christmas. However, the stock isn’t cheap and doesn’t have much of a safety margin right now. 

This could be a good time to wait and watch before investing in the stock.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Vishesh Raisinghani has positions in Shopify. The Motley Fool has positions in and recommends Shopify.

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