When the market hands you a discount on a great company, it’s worth paying attention. That’s exactly what’s happening with Shopify (TSX:SHOP) right now. This Canadian tech darling is no stranger to wild price swings. But when a stock this strong drops nearly 22% from its 52-week high, long-term investors might want to perk up. Shopify stock isn’t a speculative gamble; it’s a business with deep roots in e-commerce and a growing global footprint. And right now, it’s looking undervalued compared to where it’s been and where it could go next.
Numbers don’t lie
Let’s start with the current numbers. As of writing, Shopify stock trades around $142.50 per share. Not long ago, it was flying closer to $183.53. That’s a drop of 22%, placing it far from its peak and much closer to its 52-week low of $72.36. Despite this decline, Shopify stock still holds a market cap of around $184 billion, which gives you a sense of just how massive it is. This isn’t some scrappy upstart. It’s a proven name in the world of e-commerce platforms, powering businesses of all sizes around the world.
So, what’s behind the recent dip? It wasn’t a collapse in business. In fact, Shopify stock reported a very strong first-quarter earnings result for 2025. Revenue came in at US$2.36 billion, which marked a 27% year-over-year increase. That kind of top-line growth is hard to ignore. Gross merchandise volume (GMV) is basically the total value of transactions processed through Shopify’s platform, which rose to US$74.75 billion, up 23% from the same time last year. It’s clear that Shopify stock is still expanding, and merchants are still choosing it to run their stores.
What happened?
But here’s the part that made investors pause. Shopify stock posted a net loss of US$682 million. That’s a big number, and it made headlines. But when you dig deeper, you find that most of the loss was due to a US$908 million write-down on equity investments. That’s more of a paper loss than a business failure. If you strip out those one-time charges, the adjusted net income actually came in at US$226 million. That’s up from US$144 million a year ago. Operating income also more than doubled to US$203 million, and Shopify stock’s free cash flow jumped to US$363 million, representing a solid 15% margin. That kind of financial progress shows a company that’s not only growing but managing its cash wisely.
Looking ahead, Shopify stock expects more of the same. Management is forecasting revenue growth in the mid-20% range for the second quarter of 2025. Gross profit is expected to grow in the high teens, and free cash flow should stay in the mid-teens as a percentage of revenue. So even with the market being cautious, Shopify stock is charging ahead with plans that suggest sustainable growth is still in play.
Think long term
One of the big reasons Shopify is worth holding onto is its position in the digital economy. It has grown beyond a simple e-commerce platform. It now offers payment processing, shipping, financing, and even artificial intelligence (AI)-powered tools to help merchants manage their businesses. It’s built an ecosystem that’s sticky; once a merchant starts using Shopify, switching to a competitor isn’t an easy decision.
It’s also important to remember that volatility is part of the story with tech stocks, especially those with ambitious growth plans. Shopify stock has gone through boom-and-bust cycles before. In 2020 and 2021, it skyrocketed. Then came the sell-offs. Now, it seems to be back on solid footing, financially stronger and still expanding. If you’re buying for the long haul, the dips can be opportunities to lock in value.
Bottom line
So, what’s the bottom line? Shopify is down nearly 22% from its high, but the business is still thriving. Revenue is climbing, cash flow is strong, and the future outlook remains optimistic. For investors with a long time horizon, this could be the right moment to scoop up shares while the stock is still trading below its potential. It won’t stay this cheap forever, and when the market comes around, those who bought the dip might be very glad they did.
