SHOP
Shopify Inc.
$103.00
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 17.0% above fair value
You pay
$103.00
Bear
$53.66
Fair
$88.03
Bull
$129.88
Bear
$53.66
-47.9%
11% stage 1 growth, 12% discount
Fair
$88.03
-14.5%
19% stage 1 growth, 12% discount
Bull
$129.88
+26.1%
25% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
41%
Implied Market Multiple
76.7x
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 $156.79 from 63 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $88.03 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 $156.79 (from 63 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