Shopify Fundamental & Technical Analysis


Chart done on hourly timeframe. Considered one of the most dominant e-commerce platforms, Shopify has managed to make a name for itself in the online marketplace. Revenue has grown at an average rate of of 61% over the last seven years, and their net income was growing immensely too, until 2022. The company saw a large downturn on its profits last year, but it wasn’t for a negative reason. Shopify boosted its spending on research and development, which investors like to see in any company; sales and marketing expenses also increased, widening the losses for Shopify. Nonetheless, the company’s revenue growth is still impressive, and all the money they’ve spent is expected to pay off, investors will watch for that pay-off over the next several quarters. Their balance sheet is impressive at a 5:1 asset to liability ratio, but free cash flow is about breakeven. Free cash flow is important to have as any company because it provides a safeguard against unexpected events. 

When comparing Shopify to a competitor like Wix, we do see that Wix has a significantly smaller market valuation, but their fundamentals aren’t very attractive. Wix’s liabilities outweigh assets, and their revenue is barely scratching 1B, far less than Shopify’s 6B. Wix’s market cap is currently 4.87B while Shopify’s is 82.56B. Shopify’s market cap is high if we calculate it based on its current revenue, but if they can keep up the double digit revenue gain, that’ll meet the valuation it has right now. 


Shopify is trading right around the highs from their previous earnings, despite the efforts to push higher. Buyers have had trouble holding the stock above 70.00, but it is still in a bullish territory. The lack of movement means there hasn’t been any excitement to push the stock up or down so it will likely wait till earnings to make its move.