138.92 USD
+1.42 (+1.03%)
141.18 USD
+2.26 (+1.63%)
SHOP gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 88 industry peers in the IT Services industry. SHOP has an excellent financial health rating, but there are some minor concerns on its profitability. SHOP is valued quite expensively, but it does show have an excellent growth rating. These ratings would make SHOP suitable for growth investing!
1. Profitability
1.1 Basic Checks
- In the past year SHOP was profitable.
- SHOP had a positive operating cash flow in the past year.
- 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
- SHOP's Return On Assets of 11.84% is amongst the best of the industry. SHOP outperforms 89.77% of its industry peers.
- Looking at the Return On Equity, with a value of 14.24%, SHOP is in the better half of the industry, outperforming 76.14% of the companies in the same industry.
- SHOP has a better Return On Invested Capital (8.30%) than 71.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.84% | ||
| ROE | 14.24% | ||
| ROIC | 8.3% |
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
- Looking at the Profit Margin, with a value of 16.65%, SHOP belongs to the top of the industry, outperforming 93.18% of the companies in the same industry.
- SHOP's Profit Margin has declined in the last couple of years.
- SHOP has a Operating Margin of 12.29%. This is in the better half of the industry: SHOP outperforms 75.00% of its industry peers.
- In the last couple of years the Operating Margin of SHOP has grown nicely.
- Looking at the Gross Margin, with a value of 48.75%, SHOP is in the better half of the industry, outperforming 69.32% of the companies in the same industry.
- SHOP's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.29% | ||
| PM (TTM) | 16.65% | ||
| GM | 48.75% |
OM growth 3Y23.17%
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.
- SHOP has more shares outstanding than it did 1 year ago.
- The number of shares outstanding for SHOP has been increased compared to 5 years ago.
- SHOP has a better debt/assets ratio than last year.
2.2 Solvency
- SHOP has an Altman-Z score of 44.64. This indicates that SHOP is financially healthy and has little risk of bankruptcy at the moment.
- SHOP's Altman-Z score of 44.64 is amongst the best of the industry. SHOP outperforms 98.86% of its industry peers.
- SHOP has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.48 | ||
| Altman-Z | 44.64 |
ROIC/WACC0.99
WACC8.39%
2.3 Liquidity
- A Current Ratio of 3.93 indicates that SHOP has no problem at all paying its short term obligations.
- SHOP has a better Current ratio (3.93) than 85.23% of its industry peers.
- A Quick Ratio of 3.93 indicates that SHOP has no problem at all paying its short term obligations.
- SHOP has a better Quick ratio (3.93) than 85.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.93 | ||
| Quick Ratio | 3.93 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 15.65% over the past year.
- The Earnings Per Share has been growing by 70.21% on average over the past years. This is a very strong growth
- The Revenue has grown by 30.25% in the past year. This is a very strong growth!
- SHOP shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 41.27% yearly.
EPS 1Y (TTM)15.65%
EPS 3Y23.18%
EPS 5Y70.21%
EPS Q2Q%-2.86%
Revenue 1Y (TTM)30.25%
Revenue growth 3Y24.41%
Revenue growth 5Y41.27%
Sales Q2Q%31.54%
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 24.01% on average per year.
- Based on estimates for the next years, SHOP will show a very strong growth in Revenue. The Revenue will grow by 23.85% on average per year.
EPS Next Y23.29%
EPS Next 2Y25.37%
EPS Next 3Y26%
EPS Next 5Y24.01%
Revenue Next Year30.47%
Revenue Next 2Y27.16%
Revenue Next 3Y25.37%
Revenue Next 5Y23.85%
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 104.45, SHOP can be considered very expensive at the moment.
- SHOP's Price/Earnings ratio is in line with the industry average.
- SHOP is valuated expensively when we compare the Price/Earnings ratio to 28.60, which is the current average of the S&P500 Index.
- SHOP is valuated quite expensively with a Price/Forward Earnings ratio of 73.65.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of SHOP is on the same level as its industry peers.
- SHOP is valuated expensively when we compare the Price/Forward Earnings ratio to 25.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 104.45 | ||
| Fwd PE | 73.65 |
4.2 Price Multiples
- SHOP's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. SHOP is more expensive than 60.23% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of SHOP is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 95.03 | ||
| EV/EBITDA | 127.31 |
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.
- A more expensive valuation may be justified as SHOP's earnings are expected to grow with 26.00% in the coming years.
PEG (NY)4.49
PEG (5Y)1.49
EPS Next 2Y25.37%
EPS Next 3Y26%
5. Dividend
5.1 Amount
- SHOP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
SHOPIFY INC - CLASS A / SHOP FAQ
What is the ChartMill fundamental rating of SHOPIFY INC - CLASS A (SHOP) stock?
ChartMill assigns a fundamental rating of 6 / 10 to SHOP.
What is the valuation status for SHOP stock?
ChartMill assigns a valuation rating of 2 / 10 to SHOPIFY INC - CLASS A (SHOP). This can be considered as Overvalued.
What is the profitability of SHOP stock?
SHOPIFY INC - CLASS A (SHOP) has a profitability rating of 6 / 10.
How financially healthy is SHOPIFY INC - CLASS A?
The financial health rating of SHOPIFY INC - CLASS A (SHOP) is 8 / 10.