Shopify(US:SHOP) ZACKSยท2025-07-15 16:41Core Insights - Shopify (SHOP) is experiencing significant growth in its merchant base, leading to an increase in Gross Merchandise Volume (GMV) and reinforcing its position as a leading e-commerce platform [1][2] Group 1: GMV Growth and Merchant Base - In Q1 2025, Shopify's GMV reached $74.75 billion, reflecting a year-over-year increase of 22.8% [2][9] - The growth in GMV is attributed to same-store sales growth from existing merchants, an increase in the number of merchants on the platform, and strong performance in Europe [2][9] - Shopify has achieved over 20% GMV growth for seven consecutive quarters, highlighting the platform's strength in supporting merchants [2] Group 2: Merchant-Friendly Tools - New tools such as Shop Pay, Shopify Pay Instalments, Sign in with Shop, and the Shop App are contributing to the acquisition of new merchants [3] - Shopify Payments is gaining traction, with GMV penetration reaching 64% in Q1 2025 [4] - Shop Pay's GMV increased by 57% year over year, processing over $22 billion, while the Shop App's native GMV surged 94% year over year in the same quarter [4][9] Group 3: Competitive Landscape - Shopify faces competition from MercadoLibre and eBay in the e-commerce sector [5][6] - MercadoLibre reported a GMV of $13.3 billion in Q1 2025, marking a 17% year-over-year increase [5] - eBay's total GMV for Q1 2025 was $18.8 billion, showing a year-over-year growth of 1% [6] Group 4: Stock Performance and Valuation - Shopify's shares have increased by 9.8% year to date, outperforming the Zacks Computer & Technology sector's return of 7.4% [7] - The stock is trading at a forward 12-month Price/Sales ratio of 12.66X, significantly higher than the industry's 5.39X [10] - The Zacks Consensus Estimate for Q2 2025 earnings is 28 cents per share, indicating a 7.69% year-over-year increase [12]