SHOPIFY INC - CLASS A (SHOP.CA) Stock Fundamental Analysis
TSX:SHOP - Toronto Stock Exchange - CA82509L1076 - Common Stock - Currency: CAD
SHOP gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 15 industry peers in the IT Services industry. SHOP scores excellent points on both the profitability and health parts. This is a solid base for a good stock. SHOP shows excellent growth, but is valued quite expensive already. These ratings could make SHOP a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
In the past year SHOP was profitable.
In the past year SHOP had a positive cash flow from operations.
Of the past 5 years SHOP 4 years were profitable.
Of the past 5 years SHOP 4 years had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 14.50%, SHOP belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
Looking at the Return On Equity, with a value of 17.47%, SHOP belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
The Return On Invested Capital of SHOP (7.27%) is better than 91.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.5% | ||
| ROE | 17.47% | ||
| ROIC | 7.27% |
ROA(3y)-5.5%
ROA(5y)1.89%
ROE(3y)-7.69%
ROE(5y)1.62%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
The Profit Margin of SHOP (22.74%) is better than 100.00% of its industry peers.
In the last couple of years the Profit Margin of SHOP has declined.
The Operating Margin of SHOP (12.11%) is better than 91.67% of its industry peers.
In the last couple of years the Operating Margin of SHOP has grown nicely.
SHOP's Gross Margin of 50.36% is fine compared to the rest of the industry. SHOP outperforms 75.00% of its industry peers.
In the last couple of years the Gross Margin of SHOP has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.11% | ||
| PM (TTM) | 22.74% | ||
| GM | 50.36% |
OM growth 3Y23.18%
OM growth 5YN/A
PM growth 3Y-28.88%
PM growth 5YN/A
GM growth 3Y-2.18%
GM growth 5Y-1.69%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SHOP is destroying value.
Compared to 1 year ago, SHOP has more shares outstanding
Compared to 5 years ago, SHOP has more shares outstanding
The debt/assets ratio for SHOP has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 39.56 indicates that SHOP is not in any danger for bankruptcy at the moment.
SHOP has a better Altman-Z score (39.56) than 100.00% of its industry peers.
There is no outstanding debt for SHOP. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.57 | ||
| Altman-Z | 39.56 |
ROIC/WACC0.78
WACC9.33%
2.3 Liquidity
A Current Ratio of 3.71 indicates that SHOP has no problem at all paying its short term obligations.
The Current ratio of SHOP (3.71) is better than 100.00% of its industry peers.
SHOP has a Quick Ratio of 3.71. This indicates that SHOP is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 3.71, SHOP belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.71 | ||
| Quick Ratio | 3.71 |
3. Growth
3.1 Past
SHOP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 64.38%, 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 70.21% on average per year.
SHOP shows a strong growth in Revenue. In the last year, the Revenue has grown by 25.78%.
The Revenue has been growing by 41.27% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)64.38%
EPS 3Y23.18%
EPS 5Y70.21%
EPS Q2Q%14.71%
Revenue 1Y (TTM)25.78%
Revenue growth 3Y24.41%
Revenue growth 5Y41.27%
Sales Q2Q%31.16%
3.2 Future
Based on estimates for the next years, SHOP will show a very strong growth in Earnings Per Share. The EPS will grow by 22.98% on average per year.
The Revenue is expected to grow by 20.86% on average over the next years. This is a very strong growth
EPS Next Y27.75%
EPS Next 2Y26.29%
EPS Next 3Y28.7%
EPS Next 5Y22.98%
Revenue Next Year24.18%
Revenue Next 2Y22.6%
Revenue Next 3Y21.86%
Revenue Next 5Y20.86%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 96.75, SHOP can be considered very expensive at the moment.
SHOP's Price/Earnings ratio is in line with the industry average.
SHOP's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 29.62.
SHOP is valuated quite expensively with a Price/Forward Earnings ratio of 75.58.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SHOP indicates a somewhat cheap valuation: SHOP is cheaper than 66.67% of the companies listed in the same industry.
SHOP's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 22.70.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 96.75 | ||
| Fwd PE | 75.58 |
4.2 Price Multiples
SHOP's Enterprise Value to EBITDA ratio is in line with the industry average.
SHOP's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 93.94 | ||
| EV/EBITDA | 127.35 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates SHOP does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of SHOP may justify a higher PE ratio.
SHOP's earnings are expected to grow with 28.70% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.49
PEG (5Y)1.38
EPS Next 2Y26.29%
EPS Next 3Y28.7%
5. Dividend
5.1 Amount
No dividends for SHOP!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:SHOP (2/21/2025, 7:00:00 PM)
164.48
-10.49 (-6%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners71.95%
Inst Owner ChangeN/A
Ins Owners0.21%
Ins Owner ChangeN/A
Market Cap212.97B
Analysts75.93
Price Target175.27 (6.56%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)7.51%
Min EPS beat(2)-11.32%
Max EPS beat(2)26.33%
EPS beat(4)3
Avg EPS beat(4)14.04%
Min EPS beat(4)-11.32%
Max EPS beat(4)26.33%
EPS beat(8)7
Avg EPS beat(8)54.15%
EPS beat(12)9
Avg EPS beat(12)68.51%
EPS beat(16)12
Avg EPS beat(16)68.27%
Revenue beat(2)2
Avg Revenue beat(2)0.6%
Min Revenue beat(2)0.23%
Max Revenue beat(2)0.97%
Revenue beat(4)2
Avg Revenue beat(4)-0.08%
Min Revenue beat(4)-1.17%
Max Revenue beat(4)0.97%
Revenue beat(8)6
Avg Revenue beat(8)0.88%
Revenue beat(12)8
Avg Revenue beat(12)0.06%
Revenue beat(16)11
Avg Revenue beat(16)0.95%
PT rev (1m)1.37%
PT rev (3m)7.19%
EPS NQ rev (1m)-4.61%
EPS NQ rev (3m)7.68%
EPS NY rev (1m)-1.1%
EPS NY rev (3m)9.45%
Revenue NQ rev (1m)0.63%
Revenue NQ rev (3m)3.08%
Revenue NY rev (1m)1.1%
Revenue NY rev (3m)4.51%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 96.75 | ||
| Fwd PE | 75.58 | ||
| P/S | 16.89 | ||
| P/FCF | 93.94 | ||
| P/OCF | 92.84 | ||
| P/B | 12.98 | ||
| P/tB | 13.54 | ||
| EV/EBITDA | 127.35 |
EPS(TTM)1.7
EY1.03%
EPS(NY)2.18
Fwd EY1.32%
FCF(TTM)1.75
FCFY1.06%
OCF(TTM)1.77
OCFY1.08%
SpS9.74
BVpS12.67
TBVpS12.15
PEG (NY)3.49
PEG (5Y)1.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.5% | ||
| ROE | 17.47% | ||
| ROCE | 8.98% | ||
| ROIC | 7.27% | ||
| ROICexc | 13.42% | ||
| ROICexgc | 14.47% | ||
| OM | 12.11% | ||
| PM (TTM) | 22.74% | ||
| GM | 50.36% | ||
| FCFM | 17.98% |
ROA(3y)-5.5%
ROA(5y)1.89%
ROE(3y)-7.69%
ROE(5y)1.62%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y37.81%
ROICexcg growth 5YN/A
ROICexc growth 3Y39.26%
ROICexc growth 5YN/A
OM growth 3Y23.18%
OM growth 5YN/A
PM growth 3Y-28.88%
PM growth 5YN/A
GM growth 3Y-2.18%
GM growth 5Y-1.69%
F-Score6
Asset Turnover0.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.57 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 52.78% | ||
| Cap/Sales | 0.21% | ||
| Interest Coverage | 1075 | ||
| Cash Conversion | 145.46% | ||
| Profit Quality | 79.1% | ||
| Current Ratio | 3.71 | ||
| Quick Ratio | 3.71 | ||
| Altman-Z | 39.56 |
F-Score6
WACC9.33%
ROIC/WACC0.78
Cap/Depr(3y)54.58%
Cap/Depr(5y)60.06%
Cap/Sales(3y)0.55%
Cap/Sales(5y)0.84%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)64.38%
EPS 3Y23.18%
EPS 5Y70.21%
EPS Q2Q%14.71%
EPS Next Y27.75%
EPS Next 2Y26.29%
EPS Next 3Y28.7%
EPS Next 5Y22.98%
Revenue 1Y (TTM)25.78%
Revenue growth 3Y24.41%
Revenue growth 5Y41.27%
Sales Q2Q%31.16%
Revenue Next Year24.18%
Revenue Next 2Y22.6%
Revenue Next 3Y21.86%
Revenue Next 5Y20.86%
EBIT growth 1Y17816.7%
EBIT growth 3Y53.25%
EBIT growth 5YN/A
EBIT Next Year41.45%
EBIT Next 3Y37.41%
EBIT Next 5Y27.97%
FCF growth 1Y76.46%
FCF growth 3Y48.78%
FCF growth 5Y187.01%
OCF growth 1Y71.19%
OCF growth 3Y44.49%
OCF growth 5Y87.04%