Should You Buy Shopify Stock Before Nov. 3? History Has a Clear Answer.

Shopify (NASDAQ: SHOP) will report earnings for the third quarter of 2026 on Nov. 3. Since it began to recover from its 52-week low closing price on May 13, the stock has risen by just over 75%.

That has led to its first record close in nearly a year. However, the recent gain may set investor expectations too high, adding to the risk of disappointment.

Indeed, the history of third-quarter reports tends to bode well for Shopify. Nonetheless, since its recent history suggests headwinds, investors should probably hold rather than buy the stock at this time.

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Shopify and third-quarter earnings

Investors tend to consider a variety of metrics in these reports. Gross merchandise volume, revenue growth, free cash flow, and forward guidance are among these numbers.

With an increasingly popular sales platform and a vast ecosystem, Shopify's growth suggests that investors should be optimistic long term. Shopify has consistently delivered double-digit revenue growth for years, and the third quarter of 2026 will likely not be an exception.

Looking forward, consensus analyst estimates forecast revenue of $3.65 billion. If that holds, it will represent a 32% increase from year-ago levels. On a non-GAAP basis, they also predict earnings of $0.46 per share, 35% above the $0.34 per share reported in the year-ago quarter.

Moreover, in four of the previous five third-quarter reports, the SaaS stock price rose in the trading session following the earnings report. This is likely a measure of maturity and timing. With the exception of 2022, when it briefly entered the capital-intensive logistics business, Shopify has delivered positive free cash flow.

More importantly, Q3 is always a time when retailers of all sizes prepare for the busy holiday season. This attracts retailers who want to launch or revamp online sales sites using Shopify. They are likely also making greater use of Shopify's ecosystem as they prepare for a busy end-of-year period.

Unfortunately, the third quarter of 2025 was an exception in terms of stock performance. One factor was its highly elevated price-to-earnings (P/E) ratio of 127 at that time. Also, an earnings miss in Q4 followed, and Shopify stock trended downward until the following May.

Today's conditions appear similar. Its P/E is now 114, only slightly lower than it was one year ago. Additionally, heavy investment in artificial intelligence (AI) solutions has become a headwind for stocks in general, and that could easily give investors another reason to sell. Considering near-term challenges, now might be the time to turn cautious.

Treat Shopify as a hold going into earnings

Given its recent history, investors should probably refrain from adding shares before the Nov. 3 release of the third-quarter 2026 earnings report.

Indeed, Shopify's rapid growth makes it a great stock to hold. Also, since holiday-season preparation typically happens in Q3, it is an objectively favorable quarter for the company.

However, Shopify's stock is trading at a lofty valuation, even as the company has spent heavily on AI. Unfortunately, these factors may negate the historical third-quarter positives, and given the risk, investors should probably not buy shares right now.

Will Healy has positions in Shopify. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.