QS Research · Michael Burry's Scion Capital analyst template · 2006
SHOPIFY INC. (SHOP)
As of 2026-11-08 · 10/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case +20% · downside -39% · upside +24%
At $148.91 [N1], SHOP is priced at 13.23x EV/Sales and 90.4x P/E [N20,N24], so the market is not missing the growth; it is already capitalizing it at the highest sales multiple in the comp table [S1]. On the TTM to Sep 30, 2026 revenue base of $14.17B [N8] and $4.73B cash [N17], the base case assumes 20% revenue growth, below the Q4 2026 low-thirties guide [S31], at today's 13.23x EV/Sales [N20]: (14.17 x 1.20 x 13.23 + 4.73) / 1.29073 = about $178, or +19.5%. The downside holds revenue flat at 8x EV/Sales: (14.17 x 8 + 4.73) / 1.29073 = about $91.5, or -38.6%; the upside holds 13.23x with 25% revenue growth: (14.17 x 1.25 x 13.23 + 4.73) / 1.29073 = about $185.2, or +24.4%. The operating business is excellent — Q3 2026 revenue rose 32% to $3,742M, operating income was $568M and FCF was $816M at a 22% margin [S31,S93] — but there is no deep-value margin of safety and the short rule is not met because the base case is above -30%, so this is a watch.
Key numbers
- Share price: $148.91
- Market cap: $192.20B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $14.17B
- EV / EBITDA (TTM): 89.4x
- P/E (TTM): 90.4x
- Price / book: 15.08x
The 15 boxes
- ✓ 1. Long-form business notes
Shopify is a two-engine commerce platform: a recurring subscription line (platform subscriptions, POS Pro, apps, domains, themes) and a larger, success-based merchant solutions line built principally on Shopify Payments processing and currency-conversion fees, with lending, shipping labels, POS hardware and advertising added on. Scale and profitability inflected sharply over the six years in the XBRL: revenue went from $5.60B in FY2022 to $11.56B in FY2025, with operating income of $1.47B and operating cash flow of $2.03B in FY2025 against $26.0M of capex. Between the FY2024 and FY2025 10-Ks the channel list added AI platforms, the R&D section added Agentic Storefronts, the app store grew from more than 16,000 to more than 21,000 apps, and headcount fell to roughly 7,600 from 8,100.
- ✓ 2. Competitive advantage
The sources support a mixed competitive picture, not a clean durable moat. Management says Shopify compares favorably on principal competitive factors including app ecosystem, brand, data analytics, AI leverage and scale, and says its intellectual property is difficult to replicate; but the same 10-K calls the market highly fragmented and competitive and warns that switching costs may not be significant for many merchants. FY2022-FY2025 figures show operating losses turning to operating income of $1.07B in FY2024 and $1.47B in FY2025, with operating cash flow positive and rising, but the sources give no merchant retention, market share, GMV or take-rate data to size the moat.
- ✓ 3. 10-Q takeaways
Q3 2026 was a high-growth quarter: revenue rose 32% to $3,742 million, GMV rose 29% to $119.1 billion, and Shopify Payments penetration reached 68%. Gross margin slipped to 48% from 49%, but operating income rose to $568 million and free cash flow was $816 million, a 22% margin; net income of $462 million was reduced by $138 million of net losses on equity and equity method investments. Q4 2026 guidance is numeric on growth and margin ranges, and the latest 10-Q says risk factors had no material changes from the 2025 Form 10-K.
- ○ 4. Corporate governance
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ○ 9. Insider trading interpretation
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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