SHOPIFY INC - CLASS A (SHOP) Stock Fundamental Analysis
USA - NASDAQ:SHOP - CA82509L1076 - Common Stock
152.41 USD
-3.64 (-2.33%)
153.7 USD
+1.29 (+0.85%)
We assign a fundamental rating of 7 out of 10 to SHOP. SHOP was compared to 85 industry peers in the IT Services industry. While SHOP has a great health rating, its profitability is only average at the moment. SHOP shows excellent growth, but is valued quite expensive already. These ratings could make SHOP a good candidate for growth investing.
1. Profitability
1.1 Basic Checks
SHOP had positive earnings in the past year.
SHOP had a positive operating cash flow in the past year.
SHOP had positive earnings in 4 of the past 5 years.
SHOP had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
SHOP has a better Return On Assets (11.84%) than 92.94% of its industry peers.
SHOP's Return On Equity of 14.24% is fine compared to the rest of the industry. SHOP outperforms 76.47% of its industry peers.
The Return On Invested Capital of SHOP (8.30%) is better than 69.41% 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
SHOP's Profit Margin of 16.65% is amongst the best of the industry. SHOP outperforms 94.12% of its industry peers.
SHOP's Profit Margin has declined in the last couple of years.
The Operating Margin of SHOP (12.29%) is better than 74.12% of its industry peers.
SHOP's Operating Margin has improved in the last couple of years.
SHOP's Gross Margin of 48.75% is fine compared to the rest of the industry. SHOP outperforms 65.88% of its industry peers.
In the last couple of years the Gross Margin of SHOP has declined.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), SHOP is creating some 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 48.73. This indicates that SHOP is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 48.73, SHOP belongs to the best of the industry, outperforming 98.82% of the companies in the same industry.
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 | 48.73 |
ROIC/WACC1.05
WACC7.88%
2.3 Liquidity
SHOP has a Current Ratio of 3.93. 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 3.93, SHOP belongs to the top of the industry, outperforming 87.06% of the companies in the same industry.
A Quick Ratio of 3.93 indicates that SHOP has no problem at all paying its short term obligations.
SHOP has a Quick ratio of 3.93. This is amongst the best in the industry. SHOP outperforms 87.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.93 | ||
| Quick Ratio | 3.93 |
3. Growth
3.1 Past
SHOP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.65%, which is quite good.
SHOP shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 70.21% yearly.
SHOP shows a strong growth in Revenue. In the last year, the Revenue has grown by 30.25%.
The Revenue has been growing by 41.27% on average over the past years. This is a very strong growth!
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
SHOP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.38% yearly.
Based on estimates for the next years, SHOP will show a very strong growth in Revenue. The Revenue will grow by 22.74% on average per year.
EPS Next Y23.05%
EPS Next 2Y24.76%
EPS Next 3Y25.97%
EPS Next 5Y21.38%
Revenue Next Year28.09%
Revenue Next 2Y25.18%
Revenue Next 3Y23.75%
Revenue Next 5Y22.74%
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
The Price/Earnings ratio is 114.59, which means the current valuation is very expensive for SHOP.
SHOP's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 25.83. SHOP is valued rather expensively when compared to this.
SHOP is valuated quite expensively with a Price/Forward Earnings ratio of 81.60.
SHOP's Price/Forward Earnings ratio is in line with the industry average.
SHOP's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 32.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 114.59 | ||
| Fwd PE | 81.6 |
4.2 Price Multiples
68.24% of the companies in the same industry are cheaper than SHOP, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as SHOP.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 104.09 | ||
| EV/EBITDA | 140.1 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of SHOP may justify a higher PE ratio.
SHOP's earnings are expected to grow with 25.97% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.97
PEG (5Y)1.63
EPS Next 2Y24.76%
EPS Next 3Y25.97%
5. Dividend
5.1 Amount
No dividends for SHOP!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
152.41
-3.64 (-2.33%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners74.51%
Inst Owner Change0.41%
Ins Owners0.1%
Ins Owner ChangeN/A
Market Cap198.08B
Revenue(TTM)10.70B
Net Income(TTM)1.78B
Analysts76.07
Price Target165.96 (8.89%)
Short Float %1.72%
Short Ratio2.98
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)9.14%
Min EPS beat(2)-0.68%
Max EPS beat(2)18.96%
EPS beat(4)1
Avg EPS beat(4)0.31%
Min EPS beat(4)-11.32%
Max EPS beat(4)18.96%
EPS beat(8)5
Avg EPS beat(8)9.45%
EPS beat(12)9
Avg EPS beat(12)90.51%
EPS beat(16)11
Avg EPS beat(16)52.5%
Revenue beat(2)2
Avg Revenue beat(2)2.15%
Min Revenue beat(2)1.17%
Max Revenue beat(2)3.12%
Revenue beat(4)3
Avg Revenue beat(4)1.14%
Min Revenue beat(4)-0.72%
Max Revenue beat(4)3.12%
Revenue beat(8)5
Avg Revenue beat(8)0.56%
Revenue beat(12)9
Avg Revenue beat(12)1.14%
Revenue beat(16)11
Avg Revenue beat(16)0.33%
PT rev (1m)2.18%
PT rev (3m)37.07%
EPS NQ rev (1m)0.17%
EPS NQ rev (3m)-3.13%
EPS NY rev (1m)1.48%
EPS NY rev (3m)2.82%
Revenue NQ rev (1m)2.8%
Revenue NQ rev (3m)6.29%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)3.38%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 114.59 | ||
| Fwd PE | 81.6 | ||
| P/S | 18.52 | ||
| P/FCF | 104.09 | ||
| P/OCF | 103.01 | ||
| P/B | 15.83 | ||
| P/tB | 16.52 | ||
| EV/EBITDA | 140.1 |
EPS(TTM)1.33
EY0.87%
EPS(NY)1.87
Fwd EY1.23%
FCF(TTM)1.46
FCFY0.96%
OCF(TTM)1.48
OCFY0.97%
SpS8.23
BVpS9.63
TBVpS9.22
PEG (NY)4.97
PEG (5Y)1.63
Graham Number16.97
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.84% | ||
| ROE | 14.24% | ||
| ROCE | 10.25% | ||
| ROIC | 8.3% | ||
| ROICexc | 16.44% | ||
| ROICexgc | 17.89% | ||
| OM | 12.29% | ||
| PM (TTM) | 16.65% | ||
| GM | 48.75% | ||
| FCFM | 17.79% |
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
ROICexgc growth 3Y37.8%
ROICexgc growth 5YN/A
ROICexc growth 3Y39.24%
ROICexc growth 5YN/A
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%
F-Score6
Asset Turnover0.71
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.48 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 62.5% | ||
| Cap/Sales | 0.19% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 142.76% | ||
| Profit Quality | 106.85% | ||
| Current Ratio | 3.93 | ||
| Quick Ratio | 3.93 | ||
| Altman-Z | 48.73 |
F-Score6
WACC7.88%
ROIC/WACC1.05
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)15.65%
EPS 3Y23.18%
EPS 5Y70.21%
EPS Q2Q%-2.86%
EPS Next Y23.05%
EPS Next 2Y24.76%
EPS Next 3Y25.97%
EPS Next 5Y21.38%
Revenue 1Y (TTM)30.25%
Revenue growth 3Y24.41%
Revenue growth 5Y41.27%
Sales Q2Q%31.54%
Revenue Next Year28.09%
Revenue Next 2Y25.18%
Revenue Next 3Y23.75%
Revenue Next 5Y22.74%
EBIT growth 1Y46.27%
EBIT growth 3Y53.23%
EBIT growth 5YN/A
EBIT Next Year32.79%
EBIT Next 3Y33.64%
EBIT Next 5Y38.64%
FCF growth 1Y169.26%
FCF growth 3Y48.78%
FCF growth 5Y186.89%
OCF growth 1Y155.93%
OCF growth 3Y44.49%
OCF growth 5Y87.03%
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 7 / 10 to SHOP.
What is the valuation status of SHOPIFY INC - CLASS A (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.
What is the financial health of SHOPIFY INC - CLASS A (SHOP) stock?
The financial health rating of SHOPIFY INC - CLASS A (SHOP) is 9 / 10.
What is the earnings growth outlook for SHOPIFY INC - CLASS A?
The Earnings per Share (EPS) of SHOPIFY INC - CLASS A (SHOP) is expected to grow by 23.05% in the next year.