Shopify stock price has moved into a correction, falling by 13% from its highest point in October last year. It was trading at $157 and could be at risk of more downside as it forms several risky chart patterns on the daily chart.
Analysts are bullish on Shopify stock
Wall Street analysts are still bullish on the Shopify stock despite its recent underperformance. RBC’s Paul Treiba recently boosted his target from $185 to $200, while Scotiabank’s Kevin Krishnaratne boosted the target to $200 from the previous $165.
Other analysts who boosted their targets for the stock were from companies like Wells Fargo, Bank of America, and Citigroup. The average estimate for the stock among analysts is $171, up by 9% from the current level. Last year, this target was $100.
Analysts point to Shopify’s strong market share in the e-commerce industry and the fact that it has more room to grow globally. Additionally, they note that it will grow as agentic growth continues.
Potential risks remain
Still, Shopify faces some major risks ahead. First, there is a risk that its business will slow down in the coming years as the industry matures.
Data compiled by Yahoo Finance shows that the company’s revenue growth for 2025 was 30% to $11.47 billion. The growth will then decelerate this year, with its revenue coming in at $14.2 billion, up by 23% YoY.
Second, Shopify is still highly overvalued as it has always been. Data compiled by Seeking Alpha shows that it has a forward price-to-earnings ratio of 115, much higher than the sector median of 26.
This valuation metric is much higher than that of other companies that are growing faster than it. For example, Nvidia, which has a faster growth rate and margin, has a forward multiple of 40.
Additionally, Amazon, which is a key competitor, has a forward PE ratio of less than 40.
Shopify is also expensive based on the rule-of-40 multiple. Data shows that the company has a forward growth metric of 23% and a net profit margin of 16%, giving it a multiple of 39%.
Shopify share price technical analysis
The other potential risk facing the SHOP stock price is its technicals. The chart above shows that it jumped to a high of $182.17 in October last year. It then pulled back to the current $157.
The stock has moved below the 50-day Exponential Moving Average (EMA), which is a bearish sign. It formed a rising wedge pattern, which is characterized by the rising and converging trendlines. This explains why the stock has moved downwards this year.
The stock has also formed a head-and-shoulders pattern. This pattern is made up of a head, two shoulders, and a neckline. It also created a diamond reversal pattern.
Therefore, the most likely scenario is where it continues falling as sellers target the key support at $150 followed by $136, its lowest level in November last year.
The bearish SHOP stock forecast will become invalid if it moves above the key resistance level at $172. Such a move will point to more gains to $200.
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