Latest news with #HarleyFinkelstein
Yahoo
15-07-2025
- Business
- Yahoo
Up 80% in the Last Year, Is Shopify Stock Stalling Out or Getting Ready for Its Next Surge?
As artificial intelligence (AI) continues to shape the digital commerce landscape, Shopify (SHOP) is working to ensure it remains not only relevant, but essential. The company's first-quarter results were more than reassuring. Shopify President Harley Finkelstein indicated in the Q1 earnings call that Shopify's agility remains a powerful asset. Palantir Just Launched Warp Speed for Warships. Does That Make PLTR Stock a Buy? This Analyst Just Doubled His Price Target on AMD Stock How High Can Nvidia Stock Go as Jensen Huang Heads to China? Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! Shopify stock has surged 9.8% year-to-date, compared to the broader market gain of 6.3%. Let's find out if Shopify can reignite sustained growth in the AI-powered era of e-commerce. Valued at $145 billion, Shopify is a commerce platform that helps individuals and businesses create and manage online stores. It offers tools for selling products online, in-person, and on social media, as well as managing payments, shipping, inventory, and marketing, all in one place. After years of rapid growth and pandemic-driven tailwinds, the Canadian company now faces a more uncertain macroeconomic environment. However, the company displayed resilience during a quarter marked by rising global trade tensions and shifting economic policy. Total revenue increased 27% year on year in Q1, marking the eighth consecutive quarter of revenue growth above 25%. Gross merchandise volume (GMV), or the total value of merchandise sold on the platform, rose 23% to $74.8 billion. This was the seventh consecutive quarter of GMV growth above 20%. Offline GMV increased 23%, indicating Shopify's growing popularity among brick-and-mortar retailers and mid-market brands. Despite ongoing geopolitical uncertainty, cross-border trade remained stable, accounting for 15% of total GMV. Additionally, international GMV increased 31%, indicating that Shopify's global expansion strategy is yielding long-term revenue and transaction scale. Shopify's merchant cohort dynamics have been a strategic growth driver for the company. Its ability to consistently outperform the broader e-commerce market, with 38 of its last 39 merchant cohorts doing so since 2015. This demonstrates the strength of its platform, execution, and merchant-first approach. Shopify Payments also achieved 64% GMV penetration as a result of its expansion into 16 new countries. Shop Pay, Shopify's accelerated checkout solution, saw 57% annual GMV growth, processing more than $22 billion in Q1 alone. However, growth alone will not be sufficient. With AI transforming everything from logistics to customer service, the next phase of e-commerce will necessitate tools that are smarter, faster, and more localized. Shopify appears to understand this and is moving quickly to meet the demand. Perhaps the most exciting recent launch is an AI-powered tool that instantly identifies duty rates based on product description and country of origin, which can mean the difference between 0% and 15% import fees, resulting in a direct margin impact. The company is also incorporating AI into its daily workflows. The Shop app has been updated to allow buyers to filter products by country, promoting local businesses and improving discovery. The Sidekick AI assistant has been redesigned for improved logic processing, multilingual support, and scalability with larger merchant datasets. Monthly active users of Sidekick more than doubled in 2025 alone. Shopify's 'AI-first' mandate is now operational too. Shopify maintained a strong 15% free cash flow margin. As of the end of the quarter, the company had $5.5 billion in cash, equivalents, and marketable securities. Heading into the second quarter, Shopify expects mid-20% revenue growth, high-teens gross profit growth, and free cash flow margins that remain in the mid-teens. Management emphasized continued investments in AI, enterprise functionality, offline retail, and global expansion. This indicates that Shopify is not backing off in the face of macroeconomic uncertainty. Analysts predict that the company will report 10.6% earnings growth and a 22.6% revenue increase in 2025. Despite Shopify's strong performance, many investors are still unsure about its valuation. To justify its premium valuation of 80x forward earnings and 13x forward sales, Shopify must continue to deliver both top-line growth and expanding profitability. Overall, Wall Street rates SHOP stock a 'Moderate Buy.' Of the 44 analysts covering SHOP, 27 rate the stock a 'Strong Buy,' two have a 'Moderate Buy' recommendation, 14 suggest a "Hold,' and one rates it a 'Strong Sell.' The stock is trading close to its mean price target of $116.76. However, its high target price of $175 suggests the stock could go as high as 53.2% over the next 12 months. Shopify's long-term goal is to evolve from a commerce enabler into a fully integrated commerce ecosystem. That means managing the checkout experience, owning shipping and fulfillment tools, and incorporating AI-powered decision-making throughout the merchant journey. However, this journey will take time. Patient investors who believe in the rise of AI-driven commerce may find Shopify poised for a new era of growth. On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Hamilton Spectator
24-06-2025
- Business
- Hamilton Spectator
Tech execs say building up tech ecosystem means resisting allure of U.S., acquisition
TORONTO - A trio of the biggest names in tech say they resisted the allure of the U.S. and businesses that saw them as a takeover target — and hope the next generation of Canadian entrepreneurs will do the same. Shopify Inc. president Harley Finkelstein, Cohere co-founder Aidan Gomez and Wealthsimple CEO Michael Katchen feel the future of the country's tech ecosystem is dependent on entrepreneurs building in Canada. In charting their rise, they faced plenty of temptation to flee the country or give in to businesses that wanted to buy their firms. Years ago, Gomez says Cohere was facing a nine-figure acquisition offer it ultimately turned down. He now feels any exit from the Canadian market would be a failure and coaches entrepreneurs who write to him not to incorporate in the U.S. Finkelstein says Shopify felt similar pressure, when it was raising a Series A and some investors made their funding conditional on a move south of the border. He says Shopify refused and eventually found an investor group that didn't care where the company was based. Their remarks came at the inaugural Toronto Tech Week, which will span more than 300 events uniting the country's entrepreneurs this week. This report by The Canadian Press was first published June 24, 2025. Companies in this story: (TSX:SHOP)
Winnipeg Free Press
24-06-2025
- Business
- Winnipeg Free Press
Tech execs say building up tech ecosystem means resisting allure of U.S., acquisition
TORONTO – A trio of the biggest names in tech say they resisted the allure of the U.S. and businesses that saw them as a takeover target — and hope the next generation of Canadian entrepreneurs will do the same. Shopify Inc. president Harley Finkelstein, Cohere co-founder Aidan Gomez and Wealthsimple CEO Michael Katchen feel the future of the country's tech ecosystem is dependent on entrepreneurs building in Canada. In charting their rise, they faced plenty of temptation to flee the country or give in to businesses that wanted to buy their firms. Years ago, Gomez says Cohere was facing a nine-figure acquisition offer it ultimately turned down. He now feels any exit from the Canadian market would be a failure and coaches entrepreneurs who write to him not to incorporate in the U.S. Finkelstein says Shopify felt similar pressure, when it was raising a Series A and some investors made their funding conditional on a move south of the border. He says Shopify refused and eventually found an investor group that didn't care where the company was based. Their remarks came at the inaugural Toronto Tech Week, which will span more than 300 events uniting the country's entrepreneurs this week. Wednesdays Columnist Jen Zoratti looks at what's next in arts, life and pop culture. This report by The Canadian Press was first published June 24, 2025. Companies in this story: (TSX:SHOP)
Yahoo
24-06-2025
- Business
- Yahoo
Tech execs say building up tech ecosystem means resisting allure of U.S., acquisition
TORONTO — A trio of the biggest names in tech say they resisted the allure of the U.S. and businesses that saw them as a takeover target — and hope the next generation of Canadian entrepreneurs will do the same. Shopify Inc. president Harley Finkelstein, Cohere co-founder Aidan Gomez and Wealthsimple CEO Michael Katchen feel the future of the country's tech ecosystem is dependent on entrepreneurs building in Canada. In charting their rise, they faced plenty of temptation to flee the country or give in to businesses that wanted to buy their firms. Years ago, Gomez says Cohere was facing a nine-figure acquisition offer it ultimately turned down. He now feels any exit from the Canadian market would be a failure and coaches entrepreneurs who write to him not to incorporate in the U.S. Finkelstein says Shopify felt similar pressure, when it was raising a Series A and some investors made their funding conditional on a move south of the border. He says Shopify refused and eventually found an investor group that didn't care where the company was based. Their remarks came at the inaugural Toronto Tech Week, which will span more than 300 events uniting the country's entrepreneurs this week. This report by The Canadian Press was first published June 24, 2025. Companies in this story: (TSX:SHOP) Tara Deschamps, The Canadian Press Sign in to access your portfolio
Yahoo
14-05-2025
- Business
- Yahoo
Strong Q1 and Nasdaq Listing Signal Bright Future for Shopify Stock (SHOP)
Shopify (SHOP) is firing on all cylinders, recording awe-inspiring results that show zero sign of slowing down. Merchant adoption continues to climb, and Shopify Payments is gaining notable traction. On top of that, the company is generating solid free cash flow as it tightens costs and introduces more high-margin products. To symbolize the company's coming of age, Shopify is set to join the Nasdaq 100 (NDX) and the Nasdaq-100 Equal Weighted Index (NDXE) later this month. Quickly and easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter With global growth, smarter AI tools, and a leaner operation, Shopify looks well-positioned to maintain this momentum. I'm stoically bullish on SHOP stock and have initiated a long position. Shopify's recent earnings report, which included a 27% YoY rise in revenues and a 22% rise in profit, further entrenches my bullish stance. Shopify's Q1 earnings, which the company posted last Thursday, were nothing short of excellent. Quarterly revenues reached $2.36 billion, with Gross Merchandise Volume (GMV) climbing 23% to $74.75 billion, powered by a 32% surge in international GMV and a staggering 109% leap in B2B GMV. Speaking on the post-earnings call, President Harley Finkelstein pointed to Shopify's unified commerce platform (now live in 39 countries) as a magnet for merchants worldwide. Moreover, Shopify Payments penetration hit 64%, up from 60%, processing $47.5 billion, a 31% jump. The numbers tell a broader story. Offline GMV grew 23%, proving Shopify's not just an online play, while Monthly Recurring Revenue (MRR) advanced 21% to $182 million, driven by Shopify Plus and subscription plans. Management noted the platform's adaptability, with AI tools streamlining merchant operations and cross-border trade holding steady at 15% of GMV. All in all, the writing on the wall is that Shopify's multi-channel prowess spreads at a breakneck pace from mom-and-pop shops to global brands. However, besides Shopifty's impressive top-line growth, its profitability metrics were downright dazzling. Gross profit rose 22% to $1.17 billion, with operating income doubling to $203 million for a 9% margin, up from 5% a year ago. Free cash flow stole the spotlight, surging 56% to $363 million, delivering a 15% margin, marking seven straight quarters of double-digit margins. So, beyond growth, we see disciplined capital and spending controls. Indeed, Shopify's cost management deserves applause. Operating expenses as a percentage of revenue declined from 51% in Q1 2023 to 36% in Q1 2025, easing a long-time investor's worry. Stock-based compensation, another sore spot, is projected to stabilize at $120 million for Q2, a fraction of revenues. In the meantime, Shopify Payments has transformed into a cash machine via frictionless transaction fees, translating to ever-rising gross margins. As a rising number of merchants opt to switch to Shopify Payments for their payment processing over time, there is no reason to assume that this trend is set to reverse anytime soon. Shopify's stock slipped post-earnings, which I found pretty surprising given how powerful its momentum was once again proven to be. Now, historically, SHOP's nosebleed valuations, often over 20x sales, kept cautious investors at bay, with shares still 40% below their 2021 highs. But today's setup is rather different. With revenue and profits compounding at a blistering pace, the stock's forward P/FCF multiple of 61x for 2025, falling to 37x by 2027, appears to be downright reasonable given the pace. In particular, consensus forecasts see free cash flow hitting $1.95 billion this year, $2.46 billion in 2026, and $3.20 billion by 2027. Notably, superb free cash flow should open room for capital return prospects, which Shopify hasn't really explored thus far. As the cash pile grows, management could start returning capital via buybacks or even dividends, which could attract a new cohort of investors to the stock. With the company's net cash position already at a considerable $5.3 billion and tons of cash expected to flow in the coming years, I believe this is an ever-growing possibility. Wall Street's outlook on Shopify is relatively bullish, despite the stock lagging in recent weeks. The stock now has a Strong Buy consensus rating, with 24 analysts currently bullish and 8 staying neutral. Notably, not a single analyst is bearish on the stock. SHOP's average price target is $117.35, indicating an upside potential of 12.5% over the coming twelve months. Shopify's imminent Nasdaq listing and superlative performance results indicate an elegant mix of growth and disciplined spending. The company's ability to scale across online, offline, B2B, and global markets while generating robust cash flows showcases a platform built for endurance. Given the constant reinvention and rollout of features, top-line growth is set to remain vigorous for many quarters to come, and the Q2 guidance for growth in the mid-20s indeed confirms this. Wall Street's free cash flow growth estimates further confirm that Shopify's bottom line is also set to snowball. Add the reasonable valuation and net cash position, and Shopify stock forms a highly compelling case. Disclaimer & DisclosureReport an Issue Sign in to access your portfolio
