Shopify (TSX: SHOP) (NASDAQ: SHOP) hasn’t had the best start to the year. The stock has been sliding along with a lot of other tech names, and a big reason is that investors are getting nervous about how pricey the sector still looks, even for companies that have been growing fast.
That said, Shopify’s actual business results have held up pretty well. In Q4 2025, it posted revenue growth of 31% and a free cash flow margin of 19%. Even better, that was the 10th quarter in a row where free cash flow margin stayed in the double digits. Looking ahead to Q1 2026, management is still guiding for revenue growth in the low-30% range, which suggests demand hasn’t exactly fallen off a cliff.
Where things get tricky is the price you’re paying for that growth. Shopify is still one of the priciest stocks on the TSX, with a market cap north of $200 billion. At roughly 13 times revenue and a price-to-earnings ratio above 120, it’s not exactly screaming “bargain.”
Shopify reports earnings early next month, and that could be the moment that changes the story if the numbers impress. Right now, though, the stock is sitting below both its short-term and long-term moving averages, so even the chart isn’t doing it any favours. It probably needs a clear catalyst to really get moving again.
So yes, the stock is down a lot this year, but that doesn’t automatically make it a deal. It’s still well above its 52-week low of $111.06, and with valuation multiples this high, a disappointing earnings report could easily send shares lower. For a lot of investors, it may make sense to wait for the next earnings update and see how the market reacts before jumping in.
Longer term, though, Shopify’s track record is hard to ignore. It’s still up more than 4,000% over the last 10 years.