Shopify Inc. (SHOP.TO) Buy, Sell or Hold

Shopify Inc. (SHOP.TO)

236.24

-0.17 (0.07%)

as of Oct 23, 2026, 8:00:00 pm Market Closed.

980 watching

RISKY

Always concerned about the valuation. Pandemic helped it. Easing of the pandemic might hurt. PE of over 275x. Growth rate is strong at over 50%. Rising interest rates negatively impact high-growth companies. Price to sales is 34x, very expensive. Exposed to smaller merchants and bumps in the economy. High beta and volatility. A trade.

COMMENT

SHOP vs. Constellation Software E-commerce continues to proliferate our economy, and SHOP grows organically. In contrast, CSU is more of a growth-by-acquisition story, buying software companies to grow in size. Therefore, CSU is safer, but SHOP has much better growth prospects. SHOP recently did a deal with Facebook. SHOP and CSU are apples vs. oranges. SHOP has more pricing power in the stock than people think as they gain market share, but he isn't sure about this with CSU. CSU has great managers and acquire well.

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TOP PICK

The technology is well developed and continues to improve it. Starting to get into lending. A must have to keep up with the index if you have a large cap portfolio. Mentions are up 75% over the last 24 hours.

BUY

A fantastic company. He does not own it because of its size and valuation. Their technology is well impeded and they are improving it all the time. They are getting into lending. They are a true Canadian champion. You will not be hurt at all. You have to own it if you are managing a large cap portfolio to keep up with the index.

DON'T BUY

Benefitting from pivot to digital commerce. 300x forward earnings, with possible 40-45% growth rate. Price to sales is 50x. Off-the-charts expensive. Share price risk if there's a bump in the road. High beta, a trading vehicle. Interest rates will eventually rise, which tends to have a negative impact on high-growth stocks like this.

BUY ON WEAKNESS

His top pick in the past. He's owned this for a long time and never sold. It's a great story. It'll probably double in the next five years. A must-buy for Canadian investors. But it's fickle--its valuation can move around. Don't buy it now. Wait for a pullback to $1,500-1,600. He expects this to go a lot higher.

BUY

Depending on the type of investor you are, it could be good. For growth investors, it is a good choice. If you are a value investor, it is more difficult to own. Hard to buy on a valuation basis. No matter how fast it grows, the multiple is much ahead.

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Curated by Michael O'Reilly since 2020.
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PAST TOP PICK

(A Top Pick Apr 13/21, Up 28.2%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with SHOP is progressing well and has achieved our $2000 objective. To be disciplined, we recommend covering 50% of the position here and to trail up the stop (from $1000) to $1550 -- near the original recommended entry. If the stop is triggered, it would all but guarantee a minimum investment return over 14%.

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BUY ON WEAKNESS

He thinks it is a hold at these levels. If you don't own it, start to pick away at it. Pick it up in a growth scare pullback. They have a great strategy and great leadership.

DON'T BUY

He can't bring himself around to the valuation for a conservative portfolio. But they've delivered growth, expanded the platform, and made a superior company. A good company vs. a good stock. They have to deliver so much future growth to justify the valuation.

RISKY

Concerned with the valuation. It's flying up again. Overbought on a technical level. 450x forward earnings, 30% growth rate. Earnings will be strong at 30%, but hard to justify the valuation, especially with the rotation to value. If something goes wrong, there's a long way to fall. A great trade, or for the growth part of your portfolio.

PARTIAL SELL

There has been a rally in AMZN-Q during the same period so he thinks it may be sector related. SHOP-T is not a buy given how much it has gone up. It is at 27 times next years expected revenue but AMZN-Q is at 3 times. It is only growing about 50-60% faster. He can't justify it. If you have owned it for a long time you might want to start taking profits.

BUY ON WEAKNESS

Really helped small businesses have an online presence during pandemic. Want to increase fulfillment side. Working to develop the e-commerce side. A lot of growth potential. Opportunity for price increases. He'd be interested at a lower entry point. Expect volatility.

BUY

Impressive staying power. One of the greatest businesses in the e-commerce world and will be for some time. Getting better and better. Tricky to buy at these valuations, but he's been saying that forever on this name. A lot of the pandemic growth is sticky and will stay.

DON'T BUY

Incredible Canadian success story of the last decade. Management has done a spectacular job and keeps on delivering. Nosebleed territory. Stepping in here, it feels there's more downside than upside. If there were a significant selloff, he'd ask is this temporary or is there some fundamental issue.

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Shopify Inc. (SHOP.TO)