SHOPIFY INC - CLASS A (SHOP) Stock Fundamental Analysis
NASDAQ:SHOP - Nasdaq - CA82509L1076 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to SHOP. SHOP was compared to 81 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 expensive, but it does show an excellent growth. With these ratings, SHOP could be worth investigating further 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
Looking at the Return On Assets, with a value of 14.50%, SHOP belongs to the top of the industry, outperforming 93.83% of the companies in the same industry.
SHOP has a better Return On Equity (17.47%) than 80.25% of its industry peers.
With a decent Return On Invested Capital value of 7.27%, SHOP is doing good in the industry, outperforming 66.67% of the companies in the same industry.
| 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
SHOP has a Profit Margin of 22.74%. This is amongst the best in the industry. SHOP outperforms 97.53% of its industry peers.
In the last couple of years the Profit Margin of SHOP has declined.
SHOP has a Operating Margin of 12.11%. This is in the better half of the industry: SHOP outperforms 77.78% of its industry peers.
In the last couple of years the Operating Margin of SHOP has grown nicely.
With a decent Gross Margin value of 50.36%, SHOP is doing good in the industry, outperforming 72.84% of the companies in the same industry.
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SHOP is destroying value.
The number of shares outstanding for SHOP has been increased compared to 1 year ago.
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
SHOP has an Altman-Z score of 28.98. This indicates that SHOP is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of SHOP (28.98) is better than 98.77% 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 | 28.98 |
ROIC/WACC0.9
WACC8.09%
2.3 Liquidity
SHOP has a Current Ratio of 3.71. This indicates that SHOP is financially healthy and has no problem in meeting its short term obligations.
SHOP has a better Current ratio (3.71) than 88.89% of its industry peers.
A Quick Ratio of 3.71 indicates that SHOP has no problem at all paying its short term obligations.
SHOP has a Quick ratio of 3.71. This is amongst the best in the industry. SHOP outperforms 88.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.71 | ||
| Quick Ratio | 3.71 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 64.38% over the past year.
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.
The Revenue has grown by 25.78% in the past year. This is a very strong growth!
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
SHOP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.83% yearly.
SHOP is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 21.72% yearly.
EPS Next Y26.79%
EPS Next 2Y26.97%
EPS Next 3Y31.15%
EPS Next 5Y20.83%
Revenue Next Year24.29%
Revenue Next 2Y22.56%
Revenue Next 3Y22.65%
Revenue Next 5Y21.72%
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 69.71 indicates a quite expensive valuation of SHOP.
Compared to the rest of the industry, the Price/Earnings ratio of SHOP is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 28.29, SHOP is valued quite expensively.
A Price/Forward Earnings ratio of 54.98 indicates a quite expensive valuation of SHOP.
The rest of the industry has a similar Price/Forward Earnings ratio as SHOP.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.08, SHOP is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 69.71 | ||
| Fwd PE | 54.98 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SHOP is valued a bit more expensive than 62.96% of the companies in the same industry.
SHOP's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 67.82 | ||
| EV/EBITDA | 89.8 |
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.
SHOP has a very decent profitability rating, which may justify a higher PE ratio.
SHOP's earnings are expected to grow with 31.15% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.6
PEG (5Y)0.99
EPS Next 2Y26.97%
EPS Next 3Y31.15%
5. Dividend
5.1 Amount
SHOP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
83.65
-0.31 (-0.37%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners71.95%
Inst Owner Change0%
Ins Owners0.21%
Ins Owner ChangeN/A
Market Cap108.31B
Analysts77.04
Price Target135.61 (62.12%)
Short Float %1.31%
Short Ratio1.87
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)-0.17%
PT rev (3m)12.83%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-5.66%
EPS NY rev (1m)-0.75%
EPS NY rev (3m)-1.84%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)0.63%
Revenue NY rev (1m)0.15%
Revenue NY rev (3m)1.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 69.71 | ||
| Fwd PE | 54.98 | ||
| P/S | 12.2 | ||
| P/FCF | 67.82 | ||
| P/OCF | 67.02 | ||
| P/B | 9.37 | ||
| P/tB | 9.77 | ||
| EV/EBITDA | 89.8 |
EPS(TTM)1.2
EY1.43%
EPS(NY)1.52
Fwd EY1.82%
FCF(TTM)1.23
FCFY1.47%
OCF(TTM)1.25
OCFY1.49%
SpS6.86
BVpS8.93
TBVpS8.56
PEG (NY)2.6
PEG (5Y)0.99
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 | 28.98 |
F-Score6
WACC8.09%
ROIC/WACC0.9
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 Y26.79%
EPS Next 2Y26.97%
EPS Next 3Y31.15%
EPS Next 5Y20.83%
Revenue 1Y (TTM)25.78%
Revenue growth 3Y24.41%
Revenue growth 5Y41.27%
Sales Q2Q%31.16%
Revenue Next Year24.29%
Revenue Next 2Y22.56%
Revenue Next 3Y22.65%
Revenue Next 5Y21.72%
EBIT growth 1Y17816.7%
EBIT growth 3Y53.25%
EBIT growth 5YN/A
EBIT Next Year40.01%
EBIT Next 3Y38.06%
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%