In Q4 2025, Shopify reported 31% revenue growth and its free cash flow margin was an impressive 19%. It was the 10th straight quarter where its free cash flow margin was in double-digits. For the first quarter of 2026, the company continues to expect its revenue growth to be in the low-30s, as Shopify's business remains resilient.
The biggest problem with Shopify stock these days is valuation. It's one of the most expensive stocks on the TSX, with a market cap of more than $200 billion. It's trading at 13 times revenue and its price-to-earnings multiple is over 120.
It reports earnings early next month, and a strong showing there could give the stock a much-needed boost. Currently, it's trading below its short-term and long-term moving averages, as even technical indicators don't suggest the stock will turn its fortunes around just yet; Shopify desperately needs a catalyst.
But while the stock is down big this year, investors shouldn't conclude that it's cheap. It's still far from its 52-week low of $111.06. And with high revenue and earnings multiples, it may still have more room to fall lower if its earnings numbers fall short of expectations. Taking a wait-and-see approach heading into earnings might be the best option right now, given the question marks surrounding the business today.
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