SHOP
Shopify Inc.
$169.52
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 232.3% above fair value
You pay
$169.52
Bear
$31.09
Fair
$51.01
Bull
$75.26
Bear
$31.09
-81.7%
11% stage 1 growth, 12% discount
Fair
$51.01
-69.9%
19% stage 1 growth, 12% discount
Bull
$75.26
-55.6%
25% stage 1 growth, 12% discount
Adjust Assumptions
19.0%
12.0%
3.0%
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
41%
Implied Market Multiple
128.4x
Market is pricing in (growth)
36.3%
vs 18.9% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (64 analysts)
$169.32
Divergence from AlphaVal
70%
Summary
Using a two-stage FCF DCF with 19% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $51.01 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 $169.32 (from 64 analysts). Our estimate is 70% 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