SHOPNEUTRAL

Gross Margin

48.8%

Higher than 25% of Technology sector peers

Updated 31h ago

Sector Performance

25th percentile

SHOP

48.8%

Sector Median

65.2%

Sector Avg

60.4%

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Deep Analysis

Gross margin, which is the percentage of revenue a company keeps after paying for the direct costs of producing its goods or services, currently stands at 48.8% for SHOP.

This figure sits well below the sector median of 65.2%, placing it at the 25th percentile among technology peers—meaning 75% of comparable companies have a higher gross margin. The metric shows no available trend data: both the year-over-year change and quarter-over-quarter change are marked as N/A, so there is no directional signal to assess improvement or deterioration. The combination of a below-median gross margin with no trend information leaves investors without a basis to gauge whether this weakness is persistent or temporary, introducing uncertainty rather than a clear risk or opportunity. This metric contradicts the overall NEUTRAL verdict because the low margin relative to peers suggests a competitive disadvantage in pricing or cost control; however, the neutral rating implies other factors, such as revenue growth or cash flow, may offset this concern.

Frequently Asked Questions

What does the Gross Margin tell investors about SHOP?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

How does SHOP's Gross Margin compare to its sector?

SHOP's Gross Margin of 48.8% compares to a Technology sector median of 65.2%, placing it in the 25th percentile.

Who are SHOP's closest peers by Gross Margin?

The closest Technology peers by Gross Margin include: ORCL (65.2%), MDB (72.2%), SAP (73.0%), LIF (77.3%), OKTA (77.8%).

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.