Shopify Inc. (SHOP) DCF Valuation
Shopify DCF: $1.3B TTM FCF, $3.5B net cash, 20% growth on GMV + B2B.
Technology · Founded 2006 · Beta 2.30
Shopify Inc.
Current price: $102.50 · Market cap ≈ $132.2B
Shopify's $1.3B TTM FCF benefits from the merchant GMV expansion and B2B/wholesale growth. The $3.5B net cash position is solid. Beta of 2.30 reflects high-growth volatility. Long-term thesis depends on cross-sell (Shop Pay, Shop Minis) and B2B adoption.
DCF Valuation Inputs
High-growth phase
Decay/growth normalization
Perpetual (≤ WACC)
Must be > terminal growth
in millions
Enterprise Value
$33M
Equity Value
$37M
Per Share
$0
Upside / (Downside)
-100.0%
PV of explicit FCF
$8M
Terminal value
$42M
PV of terminal
$25M
Terminal % of EV
76.5%
| Year | Growth | FCF ($M) | Discount Factor | PV ($M) |
|---|---|---|---|---|
| 0 | base | $1 | 1.000 | — |
| 1 | 20.0% | $2 | 0.905 | $1 |
| 2 | 16.0% | $2 | 0.819 | $1 |
| 3 | 16.0% | $2 | 0.741 | $2 |
| 4 | 16.0% | $2 | 0.671 | $2 |
| 5 | 16.0% | $3 | 0.607 | $2 |
| Terminal | perpetual | — | — | $25 |
Discount factor = 1 / (1 + WACC)ⁿ. Terminal value computed using the Gordon Growth Model: TV = FCF_N × (1 + g) / (WACC − g), then discounted back to present.
| g ＼ WACC | 8.5% | 9.5% | 10.5% | 11.5% | 12.5% |
|---|---|---|---|---|---|
| 2.5% | $0 | $0 | $0 | $0 | $0 |
| 3.0% | $0 | $0 | $0 | $0 | $0 |
| 3.5% | $0 | $0 | $0 | $0 | $0 |
| 4.0% | $0 | $0 | $0 | $0 | $0 |
| 4.5% | $0 | $0 | $0 | $0 | $0 |
Highlighted cell is your current WACC × terminal-growth assumption. Cells beyond WACC ≤ g are undefined (Gordon Growth fails).
SHOP DCF: At Default Assumptions
| Item | Value | Notes |
|---|---|---|
| Current price | $102.50 | Market |
| Intrinsic value (per share) | $0.03 | DCF model output |
| Upside / (Downside) | -100.0% | vs current price |
| Enterprise value | $$33M | PV of explicit FCF + terminal |
| Equity value | $$37M | EV − net debt |
| Key fact | Beta: 2.30 (high-growth volatility) | |
Numbers reflect TTM fundamentals + default DCF assumptions (10.5% WACC, 3.5% terminal growth, 20% Year-1 growth, 16% Years 2+). Use the calculator above to run your own scenario.
SHOP Sources & References
- SEC EDGAR: latest 10-K filing, 10-Q filings, and proxy statement for Shopify Inc. (SHOP).
- Yahoo Finance: real-time price snapshot, analyst consensus growth estimates, and 52-week range.
- S&P Capital IQ: WACC build (cost of equity via CAPM + after-tax cost of debt).
- Federal Reserve Economic Data (FRED): risk-free rate for CAPM, sector beta benchmarks.
- Damodaran Online (NYU): Technology sector WACC and beta benchmarks for cross-validation.
DCF models for other large-caps
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Author
Maya Chen, CFA
Chartered Financial Analyst
Independently reviewed
Dr. Aaron Pak, PhD
Doctor of Kinesiology & Public Health
Last reviewed: August 12, 2026 · Next scheduled review: quarterly
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Cross-checked against authoritative formulas (IRS, NIST, ACM) and updated for 2025/2026 tax years and rates.
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