SHOP
Shopify Inc.
$122.08
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 39.7% above fair value
You pay
$122.08
Bear
$53.25
Fair
$87.38
Bull
$128.91
Bear
$53.25
-56.4%
11% stage 1 growth, 12% discount
Fair
$87.38
-28.4%
19% stage 1 growth, 12% discount
Bull
$128.91
+5.6%
25% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
41%
Implied Market Multiple
91.5x
Market is pricing in (growth)
31.6%
vs 18.9% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $154.91 from 64 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $87.38 per share.
Warnings
Stock-based employee pay equals 36% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $154.91 (from 64 analysts). Our estimate is 67% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions