I’ve been looking into Shopify and there are some differing opinions. Some reports indicate that its value might increase significantly, possibly even double in the next five years. However, I’m debating whether it’s better to wait for a price drop before making a move.
They’ve experienced a year-on-year revenue increase of about 27%, with a healthy cash reserve of $363 million. Plus, they’re investing in AI and expanding into new markets. On the downside, their net income is currently negative.
What really concerns me is their P/E ratio, which stands at 90. This suggests to me that the stock could be overvalued.
I’d love to hear what others think. Is it wise to invest now or would it be better to wait for a pullback?
I’ve held Shopify since 2020, and here’s what most people don’t get - their subscription revenue is rock solid. Yeah, merchant solutions bounce around with the economy, but that monthly recurring cash flow keeps everything stable. I doubled down during the 2022 crash when it tanked from $170 to $30. That move taught me this stock’s crazy volatile, but the business keeps getting stronger underneath. That cash pile you mentioned? It’s huge because they can ride out rough patches without taking on debt or diluting us shareholders. Honestly, I’m less worried about the P/E and more concerned about Amazon and new competitors breathing down their necks. But once merchants are locked into their ecosystem, switching costs are real. The losses are temporary - they’re still in growth mode, not profit optimization. If you’re risk-averse, start small and buy the dips instead of waiting forever for the perfect entry.
shopify’s been on my radar for months but I can’t get past that valuation. the AI automation for merchant support looks solid tho. maybe worth a small position for exposure, but definitely not going heavy with that P/E.
While the P/E ratio of Shopify seems unsettling, it’s important to remember that traditional metrics often fail to capture the potential of growth stocks. I entered the market during the 2022 downturn when many were cautious about tech stocks. Although the share price suffered, the company continued to thrive.
What intrigued me was Shopify’s expansion beyond payment processing; they’re now involved in logistics, financing, and marketing. Their AI initiatives are proving effective, particularly in areas like fraud detection and inventory management. Additionally, their global expansion, especially in Europe, is gaining momentum.
However, timing investments can be tricky. I recommend considering a dollar-cost averaging strategy instead of trying to time the market perfectly. The current negative earnings are less concerning to me since they are reinvesting wisely, but the high valuation implies that any shortfall in growth could significantly impact the stock. It’s wise to keep some cash handy for any dips, given the current market volatility.
Institutional money’s telling a different story than retail sentiment. I’ve seen hedge funds quietly buying Shopify on dips - that’s usually a good sign for the fundamentals. Their Shopify Plus segment really caught my eye - growing faster than expected with enterprise clients who pay way more and stick around longer. International expansion into Latin America and Southeast Asia is still early, but e-commerce is barely scratched in those markets. My real worry isn’t the P/E - it’s how dependent they are on third-party payment processors and what happens if regulators mess with transaction fees. I’ve been selling covered calls on my shares for extra income while holding. Stock’s not for everyone, but dismissing it just on valuation metrics could mean missing a real transformation.
I’ve been trading tech stocks for ten years, and Shopify’s got that classic growth vs valuation problem. Yeah, the 90 P/E is crazy high, but Amazon and Netflix had similar multiples when they were expanding fast. What’s interesting is how they’re pivoting to enterprise clients after getting hammered during the pandemic. Enterprise deals usually mean steadier revenue than their typical small business customers. The negative earnings don’t worry me much - they’re obviously going for market share over quick profits. For timing, I learned the hard way that waiting for the perfect entry usually means you miss out completely. E-commerce is still solid despite all the economic uncertainty, and Shopify’s infrastructure spending sets them up well for the next growth wave. But with interest rates where they are, high-multiple stocks like this can get crushed in market selloffs. Really think about your risk tolerance before jumping in.