Shopify Q1 Revenue Jumps 34% to $3.17B as Shares Slump 33% YTD
Shopify’s Q1 revenues rose 34% year-over-year to $3.17 billion with adjusted EPS of $0.36, while GMV reached $100.74 billion and free cash flow totaled $476 million. Shares have fallen 33% YTD from December highs, prompting Oppenheimer to cut its price target to $175 despite maintaining an Outperform rating.
1. Strong Q1 Financial Performance
Shopify reported Q1 revenue of $3.17 billion, a 34% increase year-over-year, with adjusted EPS of $0.36. Gross Merchandise Volume climbed to $100.74 billion and free cash flow reached $476 million, underscoring robust top-line growth and cash generation.
2. Rising Costs and Net Loss
The company recorded a GAAP net loss of $581 million, driven by higher AI-driven infrastructure and operational expenses. Management noted that continued AI investments and intensified competition may pressure margins in upcoming quarters.
3. Share Price Decline and Valuation
Shares have slid 33% year-to-date from December 2025 peaks, trading near $107, reflecting broad institutional selling pressure. The stock trades at approximately 120 times trailing earnings, a premium that investors are scrutinizing despite strong growth metrics.
4. Analyst Target Adjustment and Buyback Catalyst
Oppenheimer kept its Outperform rating but lowered the price target from $200 to $175, highlighting a gap between market valuation and analyst expectations. A planned $1 billion share buyback and further monetization of AI capabilities are cited as potential catalysts for a rebound.