Core Insights - Shopify's stock price increased by 3%, aligning with the benchmark, following the previous analysis which set a price target of $185, being only 1% off the actual price [1] Company Analysis - The article emphasizes the importance of understanding macro trends and their influence on asset prices and investor behavior, particularly in relation to central bank policies and sector rotation [1] - The author has a decade of experience in asset management, focusing on equity analysis, macroeconomics, and risk-managed portfolio construction, indicating a strong background in financial markets [1] Investment Strategy - The analysis aims to provide insights and foster discussions among investors, promoting the idea that investing should be accessible and empowering [1] - The author expresses a potential interest in initiating a long position in Shopify through stock or options purchases within the next 72 hours, suggesting a positive outlook on the company's future performance [1]

Core Viewpoint - HealthStream (HSTM) is currently positioned as a more attractive investment compared to Shopify (SHOP) based on various valuation metrics and Zacks Rank [1][3]. Valuation Metrics - HSTM has a forward P/E ratio of 34.93, significantly lower than SHOP's forward P/E of 110.41, indicating that HSTM may be undervalued relative to SHOP [5]. - The PEG ratio for HSTM is 2.91, while SHOP's PEG ratio stands at 4.47, suggesting that HSTM offers better value when considering expected earnings growth [5]. - HSTM's P/B ratio is 2.03, compared to SHOP's P/B of 16.64, further highlighting HSTM's relative undervaluation [6]. Zacks Rank and Value Grades - HSTM holds a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to SHOP, which has a Zacks Rank of 3 (Hold) [3]. - In terms of Value grades, HSTM has a grade of B, while SHOP has a grade of F, reinforcing the notion that HSTM is the better option for value investors [6].

Group 1 - Shopify (NASDAQ: SHOP) has seen a significant increase of 50% year-to-date, outperforming the S&P 500 index [1] - The stock has been rated a "buy" three times since the beginning of the year [1] Group 2 - Amrita leads a boutique family office fund in Vancouver, focusing on sustainable, growth-driven companies [1] - The fund aims to maximize shareholder equity by meeting growth-oriented goals [1] - Amrita has experience in high-growth supply-chain start-ups and has worked with venture capital firms [1]

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...

Group 1: Netflix - Netflix is the leader in streaming, having faced competition but managed to recover from a period of low revenue growth [4][7] - The company continues to grow its revenue through an increasing number of paid subscribers and a deeper ecosystem that enhances its content selection [7][11] - Netflix's addressable market is estimated to be over $650 billion, significantly larger than its trailing-12-month revenue of $43.3 billion [11] - The recent acquisition of Warner Bros. Discovery for $72 billion in equity value could provide additional growth opportunities for Netflix [11] - Netflix is expanding into sports, including plans to bid for UEFA Champions League rights, which could enhance its market share and revenue [9][10] Group 2: Shopify - Shopify is a leader in e-commerce, providing merchants with easy-to-use tools to set up online stores [12][13] - The company offers a comprehensive suite of services that create high switching costs for clients, making it difficult for them to leave the platform [13] - Shopify's revenue continues to grow rapidly, although it is not yet consistently profitable [15][17] - The company has improved its profitability by eliminating its low-margin logistics business and is experiencing stronger margins and free cash flow [17] - Shopify's partnership with OpenAI to enable merchants to sell products on ChatGPT could boost its gross merchandise volume and revenue [18]

Summary of Shopify Conference Call Company Overview - **Company**: Shopify - **Industry**: E-commerce and technology solutions for merchants Key Points and Arguments Innovations and Agentic Commerce - Shopify is focusing on **agentic commerce**, which is seen as a new channel for consumer spending and merchant support [5][6] - The company has been developing technologies like **Catalog** and **Sidekick** to support merchants in this new commerce model [6][7] - Shopify is optimistic about the potential of agentic commerce to change consumer spending dynamics, although adoption rates may vary among consumers [6][7] Role of Technologies - The **Catalog product** serves as a definitive source of truth for merchants' products, enhancing their visibility in LLM (Large Language Model) searches [12][13] - Shopify believes that being the authoritative source for product information will position them favorably with LLMs, which are increasingly used for consumer searches [12][13] Market Dynamics and Consumer Relationships - Concerns were raised about the potential loss of direct consumer relationships in agentic commerce, as transactions may occur without consumers visiting merchant websites [14][15] - Shopify maintains that consumers will still visit merchant websites, and brand relationships will remain important [15][16] - The company sees an opportunity for small and medium-sized brands to gain visibility through LLMs, which may highlight lesser-known brands [17] Merchant Acquisition and Growth - Shopify's **merchant acquisition engine** is performing well, with strong growth in both small businesses and enterprise clients [27][29] - The company has seen a consistent increase in new businesses starting globally, contributing to merchant growth [29] - The growth in **Gross Merchandise Volume (GMV)** is attributed to both new merchant acquisitions and existing merchant sales [30][31] Financial Performance and Metrics - Shopify reported a **65% payments penetration** rate, indicating the percentage of transactions processed through Shopify Payments [48] - The company anticipates further growth in payments penetration, especially in Europe, where they are expanding payment options [49][50] - Future revenue growth is expected from various sources, including tax solutions, installments, and advertising [51] Operational Efficiency - Shopify has maintained stable gross margins for its Subscription Solutions, which are over 80% [56] - The company does not foresee a need for significant headcount increases, relying on internally built tools to drive efficiency [60] Market Position and Competitive Landscape - Shopify is positioned to benefit from periods of disruption in the market, as they are seen as technology leaders [21][44] - The company has a competitive edge in technology quality, although pricing strategies from competitors can pose challenges [41][42] Additional Important Insights - The company is cautious about predicting the maximum potential for payments penetration but sees ongoing growth opportunities in various regions [48][49] - Shopify is not looking to develop a full marketing software suite but will enhance marketing capabilities to assist merchants [54] This summary encapsulates the key insights from the Shopify conference call, highlighting the company's strategic focus on innovation, market dynamics, and operational efficiency.

Core Insights - Retail and e-commerce companies saw a significant increase in online spending during Black Friday, with U.S. consumers spending a record $11.8 billion, marking a 9.1% year-over-year growth [1][4] - The surge in online sales is expected to enhance the financial outlook for major e-commerce platforms such as Shopify, Amazon, and eBay, as well as the ETFs that include these companies [2][6] E-commerce Performance - The record sales were driven by a shift towards digital platforms, with e-commerce growth outpacing in-store traffic, supported by aggressive discounting and the adoption of technologies like AI and BNPL services [3] - Adobe reported an 805% increase in AI traffic to U.S. retail sites compared to the previous Black Friday [3] - U.S. e-commerce sales exceeded Adobe's forecast of 8.3% growth, with Salesforce reporting a global online spending of $79 billion, up 6%, and U.S. sales of $18 billion, up 3% [4] Individual Platform Results - Shopify merchants achieved a record $6.2 billion in sales on Black Friday, reflecting a 25% year-over-year increase [5] - Amazon's marketplace and fulfillment services likely allowed it to capture a significant share of online spending [5] ETFs and Investment Opportunities - Investing in ETFs provides a diversified approach to capitalize on the e-commerce trend, reducing volatility and risk associated with individual stocks [7] - The strong Black Friday performance indicates robust consumer demand for digital retail, positioning specific ETFs for growth [8] ETF Highlights - **Global X E-commerce ETF (EBIZ)**: Net assets of $53.1 million, exposure to 41 companies, top holdings include Shopify (5.26%) and Alibaba (5.16%), gained 2.8% leading up to Black Friday, up 18.1% year to date [9] - **ProShares Online Retail ETF (ONLN)**: NAV of $60.09 per share, exposure to 19 companies, top holdings include Amazon (23.05%), Alibaba (11.92%), and eBay (8.05%), gained 3.4% leading up to Black Friday, up 34.7% year to date [11] - **VanEck Retail ETF (RTH)**: Assets worth $256 million, exposure to 26 major retailers, top holdings include Amazon (19.62%), Walmart (10.37%), and Costco (7.35%), gained 3.7% leading up to Black Friday, up 12.9% year to date [12]

Group 1: Polen International Growth Strategy Performance - The Polen International Growth Strategy returned -4.23% gross and -4.53% net of fees in Q3 2025, underperforming the MSCI ACWI (ex-USA) which gained 6.89% [1] - The strategy's concentrated approach to quality investing did not match the index performance during the quarter [1] Group 2: Shopify Inc. Performance - Shopify Inc. (NASDAQ:SHOP) had a one-month return of -0.33% and a 52-week gain of 39.63%, closing at $158.41 per share with a market capitalization of $206.225 billion on December 08, 2025 [2] - Shopify was the top contributor to both relative and absolute performance in the Polen portfolio for Q3 2025, showcasing strong results with accelerating revenue and gross merchandise volume growth [3] - Shopify's revenue increased by 32% year-over-year in Q3 2025, with 91 hedge fund portfolios holding its stock at the end of the quarter, up from 69 in the previous quarter [4]

Core Insights - The Brown Capital Management International All-Company Fund experienced a loss of 4.46% in Q3 2025, underperforming the MSCI World ex-US Growth-Net Index, which returned 2.84% during the same period [1] - Year-to-date, the fund returned 6.67%, significantly lower than the index's 19.32% return, attributed to company-specific challenges and missing out on high-performing industries [1] Company Highlights - Shopify Inc. (NASDAQ:SHOP) is highlighted as a key stock in the fund's Q3 2025 investor letter, showcasing a one-month return of 1.38% and a substantial 39.72% increase over the last 52 weeks [2] - As of December 5, 2025, Shopify's stock closed at $161.08 per share, with a market capitalization of $209.701 billion [2] - Shopify provides a comprehensive suite of digital commerce solutions, enabling merchants to manage online stores efficiently through features like web design, inventory management, and payment processing [3] - The platform's continuous innovation and user-friendly tools create significant switching costs for merchants, fostering dependency on Shopify's ecosystem for business operations [3]

Core Thesis - Shopify Inc. is experiencing strong growth driven by its transformation into an asset-light platform, with a focus on merchant solutions and transaction-based revenue [2][3][6] Financial Performance - Revenue increased by 32% year-over-year to $2.84 billion, with Gross Merchandise Volume (GMV) reaching $92 billion [3] - GAAP operating profit rose to $343 million, and free cash flow reached $507 million, marking the ninth consecutive quarter of double-digit free cash flow margins at 18% [3] - Merchant solutions now account for 75% of total revenue, reflecting a strategic shift from subscription-based SaaS to transaction-based revenue [3] Business Model Transformation - Shopify has transitioned from a capital-intensive logistics operator to a lean, asset-light platform, which has led to reduced operating expenses and improved profitability [2][5] - The sale of its logistics business has contributed to this asset-light model, enhancing operating profit and free cash flow despite a slight decline in gross margin [5] Growth Areas and Risks - Shopify Payments processed $53 billion this quarter, achieving a 58% penetration rate, providing a stable, high-margin income stream [3] - Shopify Capital, which provides loans to small and medium-sized businesses (SMBs), grew rapidly but incurred $148 million in transaction and loan losses, up 155% year-over-year, indicating heightened credit risk [4] - Subscription solutions grew at 15% year-over-year, but monthly recurring revenue (MRR) growth slowed to 10%, suggesting market saturation among smaller merchants [4] Valuation and Market Position - Valuation analysis indicates a forward price-to-sales ratio of 8.2x for FY26, with a discounted cash flow range of $145–$170 per share, suggesting Shopify is fairly valued at $156.59 [5] - Long-term upside is contingent on managing lending risks, platform governance, and competition from Amazon, positioning Shopify as a fintech-driven e-commerce platform with significant potential [5]