SHOPIFY INC - CLASS A (SHOP) Stock Fundamental Analysis
NYSE:SHOP - New York Stock Exchange, Inc. - CA82509L1076 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to SHOP. SHOP was compared to 82 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 would make SHOP suitable for growth investing!
1. Profitability
1.1 Basic Checks
SHOP had positive earnings in the past year.
In the past year SHOP had a positive cash flow from operations.
SHOP had positive earnings in 4 of the past 5 years.
Of the past 5 years SHOP 4 years had a positive operating cash flow.
1.2 Ratios
SHOP has a Return On Assets of 14.50%. This is amongst the best in the industry. SHOP outperforms 94.87% of its industry peers.
Looking at the Return On Equity, with a value of 17.47%, SHOP is in the better half of the industry, outperforming 78.21% of the companies in the same industry.
The Return On Invested Capital of SHOP (7.27%) is better than 65.38% 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
Looking at the Profit Margin, with a value of 22.74%, SHOP belongs to the top of the industry, outperforming 98.72% of the companies in the same industry.
In the last couple of years the Profit Margin of SHOP has declined.
The Operating Margin of SHOP (12.11%) is better than 76.92% 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 50.36%, SHOP is in the better half of the industry, outperforming 73.08% 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
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
SHOP has more shares outstanding than it did 5 years ago.
The debt/assets ratio for SHOP has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 42.06 indicates that SHOP is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 42.06, SHOP belongs to the best of the industry, outperforming 98.72% 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 | 0.57 | ||
| Altman-Z | 42.06 |
ROIC/WACC0.78
WACC9.33%
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 91.03% 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 better Quick ratio (3.71) than 91.03% 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.
SHOP shows a strong growth in Revenue. In the last year, the Revenue has grown by 25.78%.
Measured over the past years, SHOP shows a very strong growth in Revenue. The Revenue has been growing by 41.27% on average per year.
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
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.
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 96.30 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.
When comparing the Price/Earnings ratio of SHOP to the average of the S&P500 Index (29.63), we can say SHOP is valued expensively.
A Price/Forward Earnings ratio of 75.38 indicates a quite expensive valuation of SHOP.
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 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 96.3 | ||
| Fwd PE | 75.38 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SHOP is valued a bit more expensive than 64.10% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as SHOP.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 93.69 | ||
| EV/EBITDA | 136.21 |
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 28.70% in the coming years.
PEG (NY)3.47
PEG (5Y)1.37
EPS Next 2Y26.29%
EPS Next 3Y28.7%
5. Dividend
5.1 Amount
SHOP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
115.56
-7.91 (-6.41%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners70.55%
Inst Owner Change0.24%
Ins Owners0.23%
Ins Owner ChangeN/A
Market Cap149.63B
Analysts75.93
Price Target135.43 (17.19%)
Short Float %1.09%
Short Ratio1.83
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)1.45%
PT rev (3m)48.12%
EPS NQ rev (1m)-4.61%
EPS NQ rev (3m)7.68%
EPS NY rev (1m)-0.31%
EPS NY rev (3m)10.31%
Revenue NQ rev (1m)0.63%
Revenue NQ rev (3m)3.08%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)3.42%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 96.3 | ||
| Fwd PE | 75.38 | ||
| P/S | 16.85 | ||
| P/FCF | 93.69 | ||
| P/OCF | 92.59 | ||
| P/B | 12.95 | ||
| P/tB | 13.5 | ||
| EV/EBITDA | 136.21 |
EPS(TTM)1.2
EY1.04%
EPS(NY)1.53
Fwd EY1.33%
FCF(TTM)1.23
FCFY1.07%
OCF(TTM)1.25
OCFY1.08%
SpS6.86
BVpS8.93
TBVpS8.56
PEG (NY)3.47
PEG (5Y)1.37
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 | 42.06 |
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%