Shopify SHOP Stock Heads to $100 on EPS Miss, Despite Revenue Beat and Buyback
Shopify (SHOP) initially surged on strong revenue growth and a $2 billion buyback announcement, but a modest earnings miss quickly erased...
Quick overview
- Shopify's shares initially rose on strong revenue growth and a $2 billion buyback announcement but fell sharply after a modest earnings miss.
- The company reported a 31% year-over-year revenue increase to $3.67 billion, exceeding forecasts, but adjusted earnings of $0.48 per share fell short of expectations.
- Despite the earnings miss, Shopify's optimistic guidance for 2026 projects revenue growth in the low-thirties percentage range, above Wall Street's estimates.
- The stock's technical picture has turned bearish, with potential for a retest of the $100 level if selling pressure continues.
Shopify (SHOP) initially surged on strong revenue growth and a $2 billion buyback announcement, but a modest earnings miss quickly erased gains and sent shares sharply lower.
Strong Revenue Growth Overshadowed by EPS Miss
Shopify delivered solid fourth-quarter results, with revenue climbing 31% year over year to $3.67 billion, beating forecasts of $3.59 billion. Gross merchandise volume (GMV) rose 31% to $123.8 billion, exceeding expectations for a 28% gain. Gross profit increased more than 25% to $1.69 billion, reflecting healthy operating momentum.
However, adjusted earnings came in at $0.48 per share, slightly below analyst expectations of $0.50. While the miss was modest, it proved enough to shift investor sentiment.
Shares closed at $127.24 prior to earnings and surged to $138 in premarket trading, reflecting an 11% jump. But the rally quickly reversed during the U.S. session, with the stock sliding to $110 at one point—now trading roughly 10% lower.
Optimistic 2026 Outlook
Despite the earnings miss, Shopify’s forward guidance was notably strong. For the first quarter of 2026, the company expects revenue growth in the “low-thirties” percentage range, significantly above Wall Street’s 25% estimate. Profit growth is projected in the high-twenties percentage range.
For full-year 2025, Shopify generated $11.56 billion in revenue, up 30% year over year. Gross profit rose 24% to $5.56 billion, representing 48% of revenue. Income from operations increased to $1.47 billion from $1.08 billion in 2024, while net income reached $1.23 billion.
The company processed $378.4 billion in GMV during 2025, up 29% year over year. Geographically, the U.S. accounted for 44% of total revenue, followed by Europe, the Middle East, and Africa at 31%, and Asia Pacific at 16%.
$2 Billion Buyback Signals Confidence
Shopify also announced a $2 billion share repurchase program, to be executed through pre-arranged algorithmic trading plans. The company ended 2025 with $5.8 billion in cash, cash equivalents, and marketable securities, providing flexibility to fund both buybacks and growth initiatives.
Technical Picture Turns Bearish
Technically, the sharp reversal has damaged momentum. After gapping higher to $138, the stock encountered resistance near the 200-day simple moving average, which rejected the move. The failure to hold gains shifted sentiment quickly.
SHOP Chart Daily – MAs Have Turned Into Resistance
With shares now trending lower, attention is turning toward a potential retest of the $100 level—and possibly below—if selling pressure continues.
The reaction underscores how, in the current market, even strong revenue growth and capital return programs may not be enough to offset earnings disappointments.
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