For Immediate ReleaseChicago, IL – October 8, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Tesla, Inc. (TSLA) , UnitedHealth Group Inc. (UNH) , Shopify Inc. (SHOP) and Waterstone Financial, Inc. (WSBF) .Here are highlights from Tuesday’s Analyst Blog:Top Research Reports for Tesla, UnitedHealth and SpotifyThe ...

Key Takeaways Shopify's Q2 2025 revenue rose 31.1% year over year to $2.68 billion. New brand signings and Shop App growth fueled Shopify's strong momentum. Expanding partner base and AI-driven tools are driving Shopify's merchant growth. Shopify (SHOP) is benefiting from its strong partner base, which is playing an important role in driving its revenue growth. In the second quarter of 2025, revenue increased 31.1% year over year to $2.68 billion.In the second quarter of 2025, Shopify signed deals with icon ...

Core Insights - Shopify (SHOP) shares have appreciated 34.9% year-to-date, outperforming the broader Zacks Computer & Technology sector's return of 16% and the Zacks Internet - Services industry's gain of 23.6% [1] - The company is introducing new merchant-friendly tools, such as Shop Minis, Shop Cash, and Sign in with Shop, which are contributing to its growth [1] Financial Performance - Merchant solutions revenues in Q2 2025 reached $2.02 billion, a 36.6% increase year-over-year, driven by strong Gross Merchandise Volume (GMV) and increased penetration of Shopify payments [2] - GMV in Q2 2025 was $87.84 billion, up 30.6% year-over-year, with offline GMV increasing by 29% and B2B GMV surging by 101% [2] - Shop Pay processed $27 billion in GMV, reflecting a 65% year-over-year growth [2] International Expansion - International GMV grew 42% year-over-year in Q2 2025, with Europe leading this growth [3] - Shopify Capital is now available in Germany and the Netherlands, enhancing access to growth funding for more merchants [3] Clientele and Partnerships - Shopify's clientele includes notable brands such as Starbucks, Canada Goose, and Michael Kors, contributing to its growing popularity [8] - The Shop App experienced a 140% year-over-year growth in native GMV, driven by events like Shop Week [8] - Shopify's partnership with Microsoft integrates its Checkout Kit into Microsoft's Copilot, enhancing the shopping experience [12] - Collaboration with Roblox opens new avenues for reaching a younger audience [13] Competitive Landscape - Shopify faces stiff competition in the e-commerce marketplace from major players like Amazon and Alibaba [14] - Amazon is expanding its offerings and has launched Generative AI tools to enhance the shopping experience [15] Earnings Estimates - The Zacks Consensus Estimate for Shopify's 2025 earnings is $1.44 per share, indicating a year-over-year growth of 10.77% [16] - The consensus for 2025 revenues is $11.21 billion, reflecting a year-over-year growth of 26.24% [17] Valuation Concerns - Shopify stock is currently considered overvalued, with a Value Score of F, trading at a forward price/sales ratio of 14.53X compared to the sector's 6.74X [18] Investment Outlook - Shopify is benefiting from strong growth in its merchant base and expanding international footprint, suggesting long-term growth potential for current investors [21]

Core Insights - Amazon and Shopify represent two distinct approaches to capturing e-commerce growth, with Amazon being a vertically integrated giant and Shopify focusing on enabling merchants through a platform-as-a-service model [1][2] Amazon (AMZN) Overview - Amazon's second-quarter earnings showed net sales of $167.7 billion, a 13% increase, and operating income of $19.2 billion, up 31% year over year, indicating strong operational efficiency [4] - Amazon Web Services (AWS) generated $30.87 billion in revenue, an 18% year-over-year increase, maintaining its leadership in the cloud infrastructure market [4][9] - The advertising segment grew 23% year over year to $15.69 billion, positioning Amazon as the third-largest digital advertising platform globally [5] - Strategic initiatives include expanding same-day and next-day delivery, launching generative AI tools, and introducing Alexa+, with projected net sales for Q3 between $174 billion and $179.5 billion, reflecting 10-13% growth [6] - The Zacks Consensus Estimate for 2025 earnings is $6.7 per share, indicating a 21.16% increase from the previous year [7] Shopify (SHOP) Overview - Shopify's second-quarter revenues surged 31% year over year to $2.68 billion, with gross merchandise volume (GMV) increasing 31% to $74.75 billion [8] - International GMV grew 42% year over year, particularly in European markets, and the B2B segment saw GMV increase by 101% [10] - Shopify's free cash flow margin was 16% in Q2, with eight consecutive quarters of double-digit margins [8] - Recent product innovations include AI-driven tools that enhance commerce capabilities, although challenges include slowing monthly recurring revenue growth and profitability pressures [10] - The Zacks Consensus Estimate for 2025 earnings is $1.44 per share, reflecting a 10.77% increase from the previous year [11] Valuation and Performance Comparison - Amazon's forward P/E ratio is 30.61x, while Shopify's is significantly higher at 83.64x, indicating a more attractive risk-adjusted valuation for Amazon [12] - Year-to-date performance shows Amazon up 3.6% with stability, while Shopify has experienced higher volatility [14] - Amazon's mature business model generates substantial free cash flow, providing flexibility for capital allocation, contrasting with Shopify's reinvestment needs [14] Conclusion - Amazon is identified as the more compelling investment opportunity due to its diversification, stronger financial foundation, and attractive valuation, with multiple growth drivers across e-commerce, cloud computing, and advertising [16] - Investors are advised to monitor Amazon for entry points, while Shopify may require better entry opportunities due to its stretched valuation [16]

Core Viewpoint - Shopify's stock has experienced significant growth, with a year-to-date increase of over 40% and a 180% rise over the past year, driven by strong financial results and positive guidance [1] Financial Performance - Shopify reported a 31% increase in Q2 revenue, reaching $2.68 billion, surpassing the analyst consensus of $2.55 billion [2] - Gross merchandise volume (GMV) grew by 31% to $87.8 billion, with international GMV increasing by 42% and Europe seeing a 49% rise [3] - Overall merchant solution revenue rose by 37% to $2 billion, supported by GMV growth and the expansion of Shopify Payments, which entered 60 new countries this year [4] Client Base and Market Expansion - The company is attracting larger brands, including Starbucks and Canada Goose, and is expanding its client base beyond small businesses [5] - Shopify's forecast for Q3 revenue growth is in the mid-to-high twenties percentage range, exceeding the 21.7% growth anticipated by analysts [6] Demand and Pricing Dynamics - Shopify has not observed significant changes in demand or buyer behavior related to tariffs, although some merchants have raised prices [7] - Only 4% of its global GMV is currently shipped under the de minimis exemption, indicating limited exposure to potential tariff impacts [7] Technological Innovations - The company is leveraging AI to enhance growth, including the launch of a Shopify Catalog for easier product data access and a Universal Cart for customers to manage items from multiple stores [8] Market Opportunities - Shopify is expanding into new areas, such as offline and business-to-business markets, which saw GMV double in the quarter [11] - With 68% of revenue coming from the U.S. and Canada, there is substantial potential for international expansion, particularly in Europe [11] Valuation Considerations - Shopify's current valuation stands at over 18 times forward price-to-sales ratio based on 2025 estimates, significantly higher than its historical range of 8 to 12 times [12]

Investment Rating - The report rates the company as "Outperform" with an expected relative return exceeding 10% over the next 12-18 months [19]. Core Insights - The company reported a total revenue of $2.7 billion for Q2 2025, reflecting a year-on-year growth of 31%, surpassing market expectations of 25% to 28% [1][2][8]. - The Gross Merchandise Volume (GMV) for the second quarter reached $88 billion, also up 31% year-on-year, with Europe showing a remarkable growth of 49% [2][8]. - The operating profit margin improved to 11%, an increase of 200 basis points year-on-year, while free cash flow stood at $422 million, representing 16% of revenue [1][2][8]. - The company has established a comprehensive layout of "online + offline + overseas + high-end + B2B" to drive revenue and GMV growth [3][9]. Summary by Sections Financial Performance - Total revenue for Q2 2025 was $2.7 billion, a 31% increase year-on-year, exceeding market expectations [1][2]. - GMV reached $88 billion, also up 31% year-on-year, with significant growth in Europe [2][8]. - Gross margin was reported at 48.6%, down 250 basis points from the previous year, but still above the industry average [2][8]. - Operating profit margin improved to 11%, with free cash flow of $422 million, marking the eleventh consecutive quarter of positive inflow [1][2][8]. Business Segments - Merchant Solutions revenue grew by 37% year-on-year, driven by increased payment penetration and partnerships with PayPal and Klarna [3][9]. - Subscription Solutions revenue increased by 17%, supported by the expansion of enterprise-level customers and the Plus package [3][9]. - Offline POS and B2B businesses saw explosive growth, with Shop Pay's GMV reaching $27 billion, a 65% increase year-on-year [3][9]. Innovations and Future Guidance - The introduction of AI-driven products like Catalog and Universal Cart has enhanced the shopping experience [4][10]. - The company expects full-year revenue growth to remain between 25% and 30%, with Q3 2025 revenue anticipated to grow by mid-to-high 20% year-on-year [4][11]. - The focus will be on enhancing international capabilities, deepening AI integration, and strengthening B2B market penetration [4][11].

Core Insights - Spotify has not observed any significant signs of demand pull-forward among consumers, indicating a stable business performance in Q2 FY25 [1][2] - Shopify is actively preparing for the shift towards Agentic Commerce and AI-driven traffic, launching innovations like Catalog, Universal Cart, and Checkout Kit to position itself as a key partner for AI companies [1][12] Group 1: Business Performance - Shopify's business performance remains strong, particularly in Europe and North America, with significant growth in all GMV ranges and product categories [2][3] - International GMV has increased by 42% year-over-year, driven by product optimization and market promotion efforts [3] Group 2: Growth Strategy - Shopify's long-term growth strategy is supported by past investments, with expectations to maintain a growth rate of around 25% to 30% in the coming years [4] - The company sees substantial opportunities for expansion in new verticals such as drilling and mining, which could significantly increase its total addressable market (TAM) [8] Group 3: Product Innovation - Shopify is enhancing its product offerings with modular pricing through Commerce Components, allowing merchants to select specific services, which has attracted large retailers [6][11] - The company is focused on integrating a seamless shopping experience into AI conversations, with Universal Cart and Checkout Kit already in use [5][12] Group 4: Marketing and Customer Acquisition - Shopify has observed strong growth in GMV, merchant base, and revenue, attributed to effective marketing investments and improved internal models for data analysis [9][10] - The success in the high-end and enterprise markets is driven by product excellence and collaboration with system integrators [11]

Core Insights - Shopify's revenues increased by 31% during the quarter, with no adverse effects from tariffs [1] - The company's performance exceeded expectations, particularly in North America and Europe, with no decline in U.S. demand [2] - Merchants have raised prices in response to inflation, with only 4% of Shopify's gross merchandise value (GMV) shipped under de minimis exemptions [3][4] Financial Performance - Shopify's global payments penetration reached 64%, a 61% increase year over year [5] - Shop Pay's GMV increased by 65% to $27 billion [5] - The company expanded its payments product into 16 new countries and introduced multi-entity support for high-volume merchants [5] Payment Innovations - Shopify introduced a USDC stablecoin option for international transactions in partnership with Coinbase [6] - The company is adapting to changing payment preferences to ensure merchants are prepared for future trends [6] Technological Advancements - Shopify is focusing on "agentic commerce," integrating shopping into AI conversations with new products like Catalog, Universal Cart, and improved Checkout Kit [7] - The AI assistant for merchants, Sidekick, offers actionable insights for inventory optimization and customer churn analysis [7]

Financial Data and Key Metrics Changes - Shopify reported Q2 revenue of $2.7 billion, up 31% year over year, with a free cash flow margin of 16% [6][10][59] - Gross profit grew 25%, with overall gross margin at 48.6%, down from 51.1% in the prior year [54][56] - Operating income for the quarter was $291 million, representing an 11% operating income margin, compared to 9% last year [58] Business Line Data and Key Metrics Changes - Offline GMV increased by 29%, driven primarily by larger retailers joining the platform [31][49] - Merchant solutions revenue rose by 37%, while subscription solutions revenue grew by 17% [51][52] - GMV in Q2 was $88 billion, up 31%, with North America and Europe showing strong performance [47][48] Market Data and Key Metrics Changes - International GMV was up 42% year over year, with Europe leading the growth [6][36] - Cross-border GMV remained consistent at 15% of total GMV in Q2 [62] - Shopify Payments penetration reached 64%, up from 61% last year [22][51] Company Strategy and Development Direction - Shopify aims to expand its reach across all geographies, particularly in Europe, and is focused on building a unified commerce platform [6][10] - The company is investing in AI and product innovations to enhance the shopping experience and streamline operations for merchants [13][21] - Shopify is committed to supporting entrepreneurs worldwide, with a focus on international expansion and product localization [35][36] Management's Comments on Operating Environment and Future Outlook - Management noted that the merchant base has remained resilient despite macroeconomic challenges, with strong performance continuing into Q3 [60][61] - The company expects Q3 revenue growth in the mid to high 20s year over year, driven by continued growth in merchant solutions [63] - Management highlighted the importance of ongoing investments in product development and marketing to sustain growth [66][68] Other Important Information - Shopify launched several new products, including Universal Cart and CheckoutKit, aimed at enhancing the shopping experience through AI integration [15][93] - The company has expanded its payments product into 16 new countries this year, nearly doubling its market accessibility [22][24] - Shopify Capital is now available in Germany and the Netherlands, providing more merchants with access to growth funding [36][57] Q&A Session Summary Question: How would you characterize the demand in the US and any potential pull forward for consumers? - Management indicated that there has not been a significant pull forward of demand, with consistent performance observed in Q2 and July [70][72] Question: What is the status of international growth and product localization? - Management acknowledged strong international growth, particularly in Europe, and emphasized ongoing efforts to enhance product offerings for international markets [75][78] Question: How does the company view long-term growth potential? - Management expressed confidence in maintaining growth rates above 25% due to past investments and expanding product offerings [82][86] Question: Will Universal Cart and Checkout Kit be available for the holiday season? - Management confirmed ongoing development of these products, aiming for integration into AI platforms to enhance shopping experiences [90][93]

Financial Data and Key Metrics Changes - Shopify reported Q2 revenue of $2.7 billion, up 31% year over year, with a free cash flow margin of 16% [5][8][57] - Gross profit grew 25%, exceeding expectations, with overall gross margin at 48.6%, down from 51.1% in the prior year [52][54] - Operating income for the quarter was $291 million, representing an 11% operating income margin, compared to 9% last year [56] Business Line Data and Key Metrics Changes - GMV in Q2 was $88 billion, up 31%, with offline GMV increasing by 29% [46][29] - Merchant solutions revenue increased by 37%, driven primarily by GMV growth, while subscription solutions revenue grew by 17% [49][50] - The Shop app saw a 140% year-over-year growth in native GMV, indicating strong engagement [26] Market Data and Key Metrics Changes - International GMV was up 42% year over year, with Europe leading the growth [5][34] - Cross-border GMV remained consistent at 15% of total GMV in Q2 [60] - Shopify Payments penetration reached 64%, up from 61% last year, indicating strong adoption [22][49] Company Strategy and Development Direction - Shopify is focused on expanding its reach internationally, particularly in Europe, and enhancing its product offerings to support merchants [5][34] - The company is investing in AI-driven commerce solutions, including the launch of Universal Cart and CheckoutKit, to enhance the shopping experience [12][91] - Shopify aims to build a unified commerce platform that integrates online and offline sales channels [4][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of their merchant base amid changing economic conditions, noting strong performance in both North America and Europe [58][59] - The company anticipates continued growth in Q3, with revenue growth expected in the mid to high 20s year over year [61] - Management highlighted the importance of ongoing product innovation and market expansion as key drivers of future growth [85][86] Other Important Information - Shopify has expanded its payments product into 16 new countries this year, nearly doubling its market accessibility [21] - The company has introduced a USDC stablecoin option for payments, enhancing flexibility for merchants [23] - Shopify's capital business continues to grow, with new tools providing merchants more financing options [55] Q&A Session Summary Question: How would you characterize the demand in the US and any potential pull forward due to tariffs? - Management noted no significant pull forward in demand, with consistent performance observed in Q2 and July, indicating strong business health [69][71] Question: What is the status of international growth and localization for merchants? - Management highlighted ongoing product updates and successful expansion into new countries, with significant growth in international GMV, particularly in Europe [74][76] Question: How does the company view long-term growth potential? - Management expressed confidence in maintaining growth rates above 25%, driven by past investments and new product offerings [81][84] Question: Will Universal Cart and Checkout Kit be available for the holiday season? - Management confirmed ongoing development of these products, emphasizing their importance in enhancing the shopping experience through AI integration [89][91]