Shopify Stock Falls After Earnings. Why Good Wasn’t Good Enough.

Core Viewpoint - Shopify's stock declined after third-quarter earnings report, which, despite showing better-than-expected revenue and gross merchandise volume, did not meet investor expectations [2][3]. Financial Performance - Revenue surged 32% to $2.84 billion, exceeding the consensus estimate of $2.76 billion [3][5]. - Gross merchandise volume increased 32% to $92 billion, surpassing the projected 28% growth to $89.12 billion [3][5]. - Operating income rose 53% to $434 million, slightly missing the estimate of $435 million [3][5]. - Transaction and loan losses more than doubled to $148 million from $58 million the previous year [7]. Market Reaction - Following the earnings report, Shopify's stock fell by 3.5% [3][5]. - The stock had previously risen nearly 63% in 2025, reflecting strong performance and recovery from a significant drop in 2022 [8]. Future Outlook - Shopify expects revenue growth at a mid-to-high-twenties percentage rate, which is above the consensus estimate of 23% [4]. - Analysts noted concerns regarding a potential pullback in consumer spending, which may affect future performance [6]. Valuation Concerns - Shopify's stock is valued at approximately 98 times forward earnings, compared to about 23 times for the S&P 500 [5][7].