NYSE:SHOP qualifies as a high growth stock and is consolidating.

Growth investors are on the lookout for stocks displaying robust revenue and EPS growth. In this analysis, we'll assess whether SHOPIFY INC - CLASS A (NYSE:SHOP) aligns with growth investing criteria, especially as it consolidates and signals a possible breakout. As always, investors should conduct their own research, but SHOPIFY INC - CLASS A has surfaced on our radar for growth with base formation, warranting further examination.

A Closer Look at Growth for NYSE:SHOP

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:SHOP scores a 9 out of 10:

• SHOP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 150.00%, which is quite impressive.
• Measured over the past years, SHOP shows a very strong growth in Earnings Per Share. The EPS has been growing by 82.56% on average per year.
• The Revenue has grown by 23.47% in the past year. This is a very strong growth!
• Measured over the past years, SHOP shows a very strong growth in Revenue. The Revenue has been growing by 45.76% on average per year.
• Based on estimates for the next years, SHOP will show a very strong growth in Earnings Per Share. The EPS will grow by 23.79% on average per year.
• The Revenue is expected to grow by 20.41% on average over the next years. This is a very strong growth

How do we evaluate the Health for NYSE:SHOP?

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:SHOP scores a 8 out of 10:

• An Altman-Z score of 40.42 indicates that SHOP is not in any danger for bankruptcy at the moment.
• The Altman-Z score of SHOP (40.42) is better than 98.77% of its industry peers.
• SHOP has a debt to FCF ratio of 0.64. This is a very positive value and a sign of high solvency as it would only need 0.64 years to pay back of all of its debts.
• With an excellent Debt to FCF ratio value of 0.64, SHOP belongs to the best of the industry, outperforming 82.72% of the companies in the same industry.
• SHOP has a Debt/Equity ratio of 0.09. This is a healthy value indicating a solid balance between debt and equity.
• SHOP has a Debt to Equity ratio of 0.09. This is in the better half of the industry: SHOP outperforms 69.14% of its industry peers.
• SHOP has a Current Ratio of 7.10. This indicates that SHOP is financially healthy and has no problem in meeting its short term obligations.
• With an excellent Current ratio value of 7.10, SHOP belongs to the best of the industry, outperforming 97.53% of the companies in the same industry.
• SHOP has a Quick Ratio of 7.10. This indicates that SHOP is financially healthy and has no problem in meeting its short term obligations.
• SHOP has a Quick ratio of 7.10. This is amongst the best in the industry. SHOP outperforms 97.53% of its industry peers.

Profitability Assessment of NYSE:SHOP

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:SHOP, the assigned 5 is a significant indicator of profitability:

• SHOP has a Return On Assets of 11.23%. This is amongst the best in the industry. SHOP outperforms 88.89% of its industry peers.
• SHOP has a better Return On Equity (13.68%) than 74.07% of its industry peers.
• The Return On Invested Capital of SHOP (5.91%) is better than 62.96% of its industry peers.
• Looking at the Profit Margin, with a value of 16.85%, SHOP belongs to the top of the industry, outperforming 93.83% of the companies in the same industry.
• The Operating Margin of SHOP (11.51%) is better than 75.31% of its industry peers.
• Looking at the Gross Margin, with a value of 50.93%, SHOP is in the better half of the industry, outperforming 74.07% of the companies in the same industry.

Looking at the Setup

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NYSE:SHOP currently has a 8 as setup rating:

Besides having an excellent technical rating, SHOP also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is very little resistance above the current price. There is a support zone below the current price at 109.45, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for SHOP in the last couple of days, which is a good sign.

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Our latest full fundamental report of SHOP contains the most current fundamental analsysis.

Check the latest full technical report of SHOP for a complete technical analysis.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.