Shopify Stock To Crash To $120?

Core Insights - Shopify (SHOP) shares have surged 21% in the last month, currently priced at $172.95, but the valuation appears very high, with a potential price point of $121 being attainable [2][5][9] - The company has demonstrated strong operational performance, with revenues increasing by 29% from $7.8 billion to $10 billion in the last 12 months and a quarterly revenue rise of 31.1% [5][9] - Financial stability is strong, with a market capitalization of $224 billion, operating income of $1.5 billion, and a debt-to-equity ratio of 0.5% [4][9] Valuation - The current valuation of Shopify is considered very high, leading to a recommendation to lower exposure to SHOP shares [2][5] - Despite strong growth, the stock seems relatively expensive due to its very high valuation metrics [3][5] Growth Performance - Shopify has experienced an average revenue growth rate of 26.0% over the past three years [5] - The company generated nearly $1.8 billion in operating cash flow during the last 12 months, with a cash-to-assets ratio of 40.0% [9] Profitability - Shopify's operating margin stands at 15.3%, with a net margin of about 23.4% [9] - Profitability appears moderate when compared to the broader market [6] Financial Stability - The company has a strong financial standing, with cash (including cash equivalents) amounting to $5.8 billion of total assets [9] - Shopify's performance during economic downturns has been weaker than the S&P 500 index, indicating some vulnerability [6][10] Market Comparison - SHOP stock has shown significant volatility, declining 84.8% from its peak in November 2021 to a low in October 2022, compared to a 25.4% decline for the S&P 500 during the same period [10] - The stock has not yet reclaimed its pre-crisis high, with the highest point since then being $172.95 in October 2025 [10]