SHOPIFY INC - CLASS A (SHOP)
CA82509L1076 - Common Stock
SHOP gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 84 industry peers in the IT Services industry. SHOP is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. SHOP is valued quite expensively, but it does show have an excellent growth rating. These ratings could make SHOP a good candidate for growth 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.
In multiple years SHOP reported negative net income over the last 5 years.
SHOP had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 11.23%, SHOP belongs to the best of the industry, outperforming 87.80% of the companies in the same industry.
The Return On Equity of SHOP (13.68%) is better than 73.17% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.91%, SHOP is in the better half of the industry, outperforming 62.20% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.23% | ||
| ROE | 13.68% | ||
| ROIC | 5.91% |
ROA(3y)-3.05%
ROA(5y)-1.72%
ROE(3y)-4.78%
ROE(5y)-2.7%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
SHOP has a better Profit Margin (16.85%) than 93.90% of its industry peers.
SHOP's Profit Margin has declined in the last couple of years.
SHOP has a better Operating Margin (11.51%) than 75.61% of its industry peers.
In the last couple of years the Operating Margin of SHOP has declined.
SHOP has a Gross Margin of 50.93%. This is in the better half of the industry: SHOP outperforms 74.39% of its industry peers.
SHOP's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.51% | ||
| PM (TTM) | 16.85% | ||
| GM | 50.93% |
OM growth 3Y-74.41%
OM growth 5YN/A
PM growth 3Y-44.31%
PM growth 5YN/A
GM growth 3Y-1.83%
GM growth 5Y-2.17%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SHOP is destroying value.
The number of shares outstanding for SHOP has been increased compared to 1 year ago.
SHOP has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, SHOP has an improved debt to assets ratio.
2.2 Solvency
SHOP has an Altman-Z score of 37.95. This indicates that SHOP is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of SHOP (37.95) is better than 98.78% of its industry peers.
The Debt to FCF ratio of SHOP is 0.64, which is an excellent value as it means it would take SHOP, only 0.64 years of fcf income to pay off all of its debts.
SHOP has a better Debt to FCF ratio (0.64) than 82.93% of its industry peers.
A Debt/Equity ratio of 0.09 indicates that SHOP is not too dependend on debt financing.
SHOP's Debt to Equity ratio of 0.09 is fine compared to the rest of the industry. SHOP outperforms 69.51% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.09 | ||
| Debt/FCF | 0.64 | ||
| Altman-Z | 37.95 |
ROIC/WACC0.62
WACC9.56%
2.3 Liquidity
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.
Looking at the Current ratio, with a value of 7.10, SHOP belongs to the top of the industry, outperforming 97.56% 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's Quick ratio of 7.10 is amongst the best of the industry. SHOP outperforms 97.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 7.1 | ||
| Quick Ratio | 7.1 |
3. Growth
3.1 Past
SHOP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 152.17%, which is quite impressive.
SHOP shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 82.56% yearly.
Looking at the last year, SHOP shows a very strong growth in Revenue. The Revenue has grown by 23.47%.
SHOP shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 45.76% yearly.
EPS 1Y (TTM)152.17%
EPS 3Y22.72%
EPS 5Y82.56%
EPS Q2Q%50%
Revenue 1Y (TTM)23.47%
Revenue growth 3Y34.07%
Revenue growth 5Y45.76%
Sales Q2Q%26.14%
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 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
EPS Next Y55.27%
EPS Next 2Y38.52%
EPS Next 3Y36.89%
EPS Next 5Y23.79%
Revenue Next Year23.74%
Revenue Next 2Y22.27%
Revenue Next 3Y21.84%
Revenue Next 5Y20.41%
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
A Price/Earnings ratio of 91.79 indicates a quite expensive valuation of SHOP.
SHOP's Price/Earnings is on the same level as the industry average.
SHOP is valuated expensively when we compare the Price/Earnings ratio to 28.96, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 76.02, SHOP can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SHOP is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of SHOP to the average of the S&P500 Index (23.82), we can say SHOP is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 91.79 | ||
| Fwd PE | 76.02 |
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 63.41% 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 | 96.08 | ||
| EV/EBITDA | 129.13 |
4.3 Compensation for Growth
SHOP's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
SHOP's earnings are expected to grow with 36.89% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.66
PEG (5Y)1.11
EPS Next 2Y38.52%
EPS Next 3Y36.89%
5. Dividend
5.1 Amount
No dividends for SHOP!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
SHOPIFY INC - CLASS A
NYSE:SHOP (11/21/2024, 8:04:00 PM)
After market: 106.369 -0.11 (-0.1%)106.48
+2.54 (+2.44%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap137.58B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
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Surprises & Revisions
EPS beat(2)
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EPS NQ rev (3m)
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Revenue NQ rev (1m)
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Revenue NY rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 91.79 | ||
| Fwd PE | 76.02 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.66
PEG (5Y)1.11
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.23% | ||
| ROE | 13.68% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 11.51% | ||
| PM (TTM) | 16.85% | ||
| GM | 50.93% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.67
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.09 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 7.1 | ||
| Quick Ratio | 7.1 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)152.17%
EPS 3Y22.72%
EPS 5Y
EPS Q2Q%
EPS Next Y55.27%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)23.47%
Revenue growth 3Y34.07%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y