SHOPIFY INC - CLASS A (SHOP) Stock Fundamental Analysis
NYSE:SHOP - New York Stock Exchange, Inc. - CA82509L1076 - Common Stock
Taking everything into account, SHOP scores 6 out of 10 in our fundamental rating. 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 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.
The reported net income has been mixed in the past 5 years: SHOP reported negative net income in multiple years.
SHOP had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
SHOP's Return On Assets of 11.23% is amongst the best of the industry. SHOP outperforms 88.61% of its industry peers.
SHOP's Return On Equity of 13.68% is fine compared to the rest of the industry. SHOP outperforms 73.42% of its industry peers.
SHOP's Return On Invested Capital of 5.91% is fine compared to the rest of the industry. SHOP outperforms 62.03% of its industry peers.
| 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
Looking at the Profit Margin, with a value of 16.85%, SHOP belongs to the top of the industry, outperforming 93.67% of the companies in the same industry.
SHOP's Profit Margin has declined in the last couple of years.
With a decent Operating Margin value of 11.51%, SHOP is doing good in the industry, outperforming 74.68% of the companies in the same industry.
SHOP's Operating Margin has declined in the last couple of years.
SHOP's Gross Margin of 50.93% is fine compared to the rest of the industry. SHOP outperforms 73.42% 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
SHOP has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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 37.74. This indicates that SHOP is financially healthy and has little risk of bankruptcy at the moment.
SHOP's Altman-Z score of 37.74 is amongst the best of the industry. SHOP outperforms 97.47% 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 82.28% of its industry peers.
A Debt/Equity ratio of 0.09 indicates that SHOP is not too dependend on debt financing.
SHOP has a better Debt to Equity ratio (0.09) than 68.35% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.09 | ||
| Debt/FCF | 0.64 | ||
| Altman-Z | 37.74 |
ROIC/WACC0.58
WACC10.2%
2.3 Liquidity
A Current Ratio of 7.10 indicates that SHOP has no problem at all paying its short term obligations.
SHOP has a better Current ratio (7.10) than 98.73% of its industry peers.
A Quick Ratio of 7.10 indicates that SHOP has no problem at all paying its short term obligations.
The Quick ratio of SHOP (7.10) is better than 98.73% 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 150.00%, 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.
SHOP shows a strong growth in Revenue. In the last year, the Revenue has grown by 23.47%.
The Revenue has been growing by 45.76% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)150%
EPS 3Y22.72%
EPS 5Y82.56%
EPS Q2Q%45.83%
Revenue 1Y (TTM)23.47%
Revenue growth 3Y34.07%
Revenue growth 5Y45.76%
Sales Q2Q%26.14%
3.2 Future
SHOP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 32.75% yearly.
The Revenue is expected to grow by 23.58% on average over the next years. This is a very strong growth
EPS Next Y79.78%
EPS Next 2Y45.71%
EPS Next 3Y38.46%
EPS Next 5Y32.75%
Revenue Next Year25.8%
Revenue Next 2Y24.32%
Revenue Next 3Y22.94%
Revenue Next 5Y23.58%
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
The Price/Earnings ratio is 92.42, which means the current valuation is very expensive for SHOP.
SHOP's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.94, SHOP is valued quite expensively.
A Price/Forward Earnings ratio of 68.57 indicates a quite expensive valuation of SHOP.
The rest of the industry has a similar Price/Forward Earnings ratio as SHOP.
SHOP's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 24.11.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 92.42 | ||
| Fwd PE | 68.57 |
4.2 Price Multiples
65.82% of the companies in the same industry are cheaper than SHOP, based on the Enterprise Value to EBITDA ratio.
SHOP's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 95.9 | ||
| EV/EBITDA | 128.35 |
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 38.46% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.16
PEG (5Y)1.12
EPS Next 2Y45.71%
EPS Next 3Y38.46%
5. Dividend
5.1 Amount
No dividends for SHOP!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
SHOPIFY INC - CLASS A
NYSE:SHOP (1/21/2025, 3:42:29 PM)
After market: 106.28 0 (0%)106.28
+2.93 (+2.84%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners70.55%
Inst Owner Change-0.12%
Ins Owners0.23%
Ins Owner ChangeN/A
Market Cap137.32B
Analysts74.39
Price Target120.2 (13.1%)
Short Float %1.34%
Short Ratio1.96
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)2
Avg EPS beat(2)26.14%
Min EPS beat(2)25.95%
Max EPS beat(2)26.33%
EPS beat(4)4
Avg EPS beat(4)18.6%
Min EPS beat(4)6.91%
Max EPS beat(4)26.33%
EPS beat(8)8
Avg EPS beat(8)135.61%
EPS beat(12)10
Avg EPS beat(12)69.89%
EPS beat(16)13
Avg EPS beat(16)70.44%
Revenue beat(2)1
Avg Revenue beat(2)-0.05%
Min Revenue beat(2)-0.34%
Max Revenue beat(2)0.23%
Revenue beat(4)2
Avg Revenue beat(4)-0.02%
Min Revenue beat(4)-1.17%
Max Revenue beat(4)1.18%
Revenue beat(8)6
Avg Revenue beat(8)1.15%
Revenue beat(12)8
Avg Revenue beat(12)0.06%
Revenue beat(16)11
Avg Revenue beat(16)1.22%
PT rev (1m)1.67%
PT rev (3m)50.03%
EPS NQ rev (1m)0%
EPS NQ rev (3m)19.17%
EPS NY rev (1m)0%
EPS NY rev (3m)16.41%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)5.3%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 92.42 | ||
| Fwd PE | 68.57 | ||
| P/S | 16.72 | ||
| P/FCF | 95.9 | ||
| P/OCF | 94.77 | ||
| P/B | 13.57 | ||
| P/tB | 14.24 | ||
| EV/EBITDA | 128.35 |
EPS(TTM)1.15
EY1.08%
EPS(NY)1.55
Fwd EY1.46%
FCF(TTM)1.11
FCFY1.04%
OCF(TTM)1.12
OCFY1.06%
SpS6.36
BVpS7.83
TBVpS7.46
PEG (NY)1.16
PEG (5Y)1.12
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.23% | ||
| ROE | 13.68% | ||
| ROCE | 8.28% | ||
| ROIC | 5.91% | ||
| ROICexc | 10.35% | ||
| ROICexgc | 11.17% | ||
| OM | 11.51% | ||
| PM (TTM) | 16.85% | ||
| GM | 50.93% | ||
| FCFM | 17.44% |
ROA(3y)-3.05%
ROA(5y)-1.72%
ROE(3y)-4.78%
ROE(5y)-2.7%
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 3Y-84.12%
ROICexcg growth 5YN/A
ROICexc growth 3Y-80.85%
ROICexc growth 5YN/A
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%
F-Score7
Asset Turnover0.67
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.09 | ||
| Debt/FCF | 0.64 | ||
| Debt/EBITDA | 0.93 | ||
| Cap/Depr | 44.74% | ||
| Cap/Sales | 0.21% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 147.41% | ||
| Profit Quality | 103.47% | ||
| Current Ratio | 7.1 | ||
| Quick Ratio | 7.1 | ||
| Altman-Z | 37.74 |
F-Score7
WACC10.2%
ROIC/WACC0.58
Cap/Depr(3y)62.53%
Cap/Depr(5y)84.46%
Cap/Sales(3y)0.85%
Cap/Sales(5y)1.59%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)150%
EPS 3Y22.72%
EPS 5Y82.56%
EPS Q2Q%45.83%
EPS Next Y79.78%
EPS Next 2Y45.71%
EPS Next 3Y38.46%
EPS Next 5Y32.75%
Revenue 1Y (TTM)23.47%
Revenue growth 3Y34.07%
Revenue growth 5Y45.76%
Sales Q2Q%26.14%
Revenue Next Year25.8%
Revenue Next 2Y24.32%
Revenue Next 3Y22.94%
Revenue Next 5Y23.58%
EBIT growth 1Y282.54%
EBIT growth 3Y-65.69%
EBIT growth 5YN/A
EBIT Next Year89.58%
EBIT Next 3Y51.81%
EBIT Next 5Y44.63%
FCF growth 1Y949.85%
FCF growth 3Y33.19%
FCF growth 5YN/A
OCF growth 1Y1547.55%
OCF growth 3Y30.48%
OCF growth 5Y151.94%