SHOP PE Ratio & Valuation,Is SHOP Overvalued

SHOP Relative Valuation

SHOP's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, SHOP is overvalued; if below, it's undervalued.

Historical Valuation

Shopify Inc (SHOP) is now in the Fair zone, suggesting that its current forward PS ratio of 16.06 is considered Fairly compared with the five-year average of -39.80. The fair price of Shopify Inc (SHOP) is between 63.30 to 223.08 according to relative valuation methord.

Relative Value

Fair Zone

63.30-223.08

Current Price：164.19

Fair

98.76

89.30

EV/EBITDA

Shopify Inc. (SHOP) has a current EV/EBITDA of 89.30. The 5-year average EV/EBITDA is 10.90. The thresholds are as follows: Strongly Undervalued below -952.41, Undervalued between -952.41 and -470.76, Fairly Valued between 492.56 and -470.76, Overvalued between 492.56 and 974.21, and Strongly Overvalued above 974.21. The current Forward EV/EBITDA of 89.30 falls within the Historic Trend Line -Fairly Valued range.

90.44

EV/EBIT

Shopify Inc. (SHOP) has a current EV/EBIT of 90.44. The 5-year average EV/EBIT is 92.18. The thresholds are as follows: Strongly Undervalued below -608.81, Undervalued between -608.81 and -258.32, Fairly Valued between 442.67 and -258.32, Overvalued between 442.67 and 793.16, and Strongly Overvalued above 793.16. The current Forward EV/EBIT of 90.44 falls within the Historic Trend Line -Fairly Valued range.

16.06

Shopify Inc. (SHOP) has a current PS of 16.06. The 5-year average PS is 15.89. The thresholds are as follows: Strongly Undervalued below -3.64, Undervalued between -3.64 and 6.13, Fairly Valued between 25.66 and 6.13, Overvalued between 25.66 and 35.43, and Strongly Overvalued above 35.43. The current Forward PS of 16.06 falls within the Historic Trend Line -Fairly Valued range.

89.74

P/OCF

Shopify Inc. (SHOP) has a current P/OCF of 89.74. The 5-year average P/OCF is 82.78. The thresholds are as follows: Strongly Undervalued below -293.57, Undervalued between -293.57 and -105.39, Fairly Valued between 270.95 and -105.39, Overvalued between 270.95 and 459.13, and Strongly Overvalued above 459.13. The current Forward P/OCF of 89.74 falls within the Historic Trend Line -Fairly Valued range.

91.15

P/FCF

Shopify Inc. (SHOP) has a current P/FCF of 91.15. The 5-year average P/FCF is 68.20. The thresholds are as follows: Strongly Undervalued below -350.33, Undervalued between -350.33 and -141.07, Fairly Valued between 277.46 and -141.07, Overvalued between 277.46 and 486.72, and Strongly Overvalued above 486.72. The current Forward P/FCF of 91.15 falls within the Historic Trend Line -Fairly Valued range.

Shopify Inc (SHOP) has a current Price-to-Book (P/B) ratio of 17.09. Compared to its 3-year average P/B ratio of 11.07 , the current P/B ratio is approximately 54.39% higher. Relative to its 5-year average P/B ratio of 11.76, the current P/B ratio is about 45.39% higher. Shopify Inc (SHOP) has a Forward Free Cash Flow (FCF) yield of approximately 0.89%. Compared to its 3-year average FCF yield of 0.78%, the current FCF yield is approximately 14.06% lower. Relative to its 5-year average FCF yield of 0.60% , the current FCF yield is about 48.36% lower.

17.09

P/B

Median3y

11.07

Median5y

11.76

0.89

FCF Yield

Median3y

0.78

Median5y

0.60

Competitors Valuation Multiple

The average P/S ratio for SHOP's competitors is 5.62, providing a benchmark for relative valuation. Shopify Inc Corp (SHOP) exhibits a P/S ratio of 16.06, which is 185.73% above the industry average. Given its robust revenue growth of 31.54%, this premium appears sustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

Revenue Growth

Market Cap

Performance Decomposition

Market capitalization of SHOP increased by 54.42% over the past 1 year. The primary factor behind the change was an increase in P/E Change from 61.03 to 121.24.

The secondary factor is the Revenue Growth, contributed 31.54%to the performance.

Overall, the performance of SHOP in the past 1 year is driven by P/E Change. Which is more unsustainable.

31.54%

2.16B → 2.84B

Revenue Growth

-75.77%

38.30 → 9.28

Margin Expansion

98.65%

61.03 → 121.24

P/E Change

54.42%

106.33 → 164.19

Mkt Cap Growth

People Also Watch

Frequently Asked Questions

Is Shopify Inc (SHOP) currently overvalued or undervalued?

What is Shopify Inc (SHOP) fair value?

SHOP's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average , adjusted by weights. The fair price of Shopify Inc (SHOP) is between 63.30 to 223.08 according to relative valuation methord.

How does SHOP's valuation metrics compare to the industry average?

What is the current P/B ratio for Shopify Inc (SHOP) as of Dec 15 2025?

As of Dec 15 2025, Shopify Inc (SHOP) has a P/B ratio of 17.09. This indicates that the market values SHOP at 17.09 times its book value.

What is the current FCF Yield for Shopify Inc (SHOP) as of Dec 15 2025?

As of Dec 15 2025, Shopify Inc (SHOP) has a FCF Yield of 0.89%. This means that for every dollar of Shopify Inc’s market capitalization, the company generates 0.89 cents in free cash flow.

What is the current Forward P/E ratio for Shopify Inc (SHOP) as of Dec 15 2025?

As of Dec 15 2025, Shopify Inc (SHOP) has a Forward P/E ratio of 98.76. This means the market is willing to pay $98.76 for every dollar of Shopify Inc’s expected earnings over the next 12 months.

What is the current Forward P/S ratio for Shopify Inc (SHOP) as of Dec 15 2025?

As of Dec 15 2025, Shopify Inc (SHOP) has a Forward P/S ratio of 16.06. This means the market is valuing SHOP at $16.06 for every dollar of expected revenue over the next 12 months.

SHOP Valuation