Buy and Hold: Top Growth Stock Drops 16% in 2026
As we enter 2026, stock market volatility is apparent, notably impacting significant players like Shopify. The company’s stock has already plummeted by 16% this year. However, long-term prospects remain promising for this e-commerce giant.
Shopify’s Strong Business Fundamentals
Shopify (SHOP) showed remarkable growth in 2025, and this trend appears to continue. The company reported a robust 32% increase in revenue during the third quarter, reaching $2.8 billion. This growth was supported by a similar 32% surge in gross merchandise volume, amounting to $92 billion.
Profitability and Financial Performance
Despite a year-over-year decline in net income during this same quarter, largely due to an equity investment, Shopify has remained profitable over the last 12 months. Its financial stability is indicated by the following metrics:
- Current Price: $113.18
- Market Capitalization: $156 billion
- Price Change Today: -5.12% ($-6.11)
- 52-Week Price Range: $69.84 – $182.19
- Average Daily Volume: 8.2 million
- Gross Margin: 48.57%
Valuation Concerns and Growth Potential
Shopify’s shares are currently trading at a forward price-to-earnings ratio of 75.7, a figure that raises concerns about potential overvaluation. This is substantially higher than the sector average of 26.3. However, the company’s price/earnings-to-growth (PEG) ratio stands at a more reasonable 1.1, suggesting relative value.
Investors looking to hold Shopify stock for the long term may find current volatility manageable. Shopify’s leadership in the e-commerce sector positions it well to capitalize on industry growth, despite fluctuations in share price.
Conclusion: A Long-Term Investment?
The recent 16% drop in Shopify’s stock price raises questions about investment timing. Still, with solid underlying fundamentals and a strong market position, many analysts believe that Shopify remains a viable option for long-term growth investors. The company is well-placed to navigate market challenges and deliver continued value.
