SHOPIFY INC - CLASS A (SHOP.CA) Stock Fundamental Analysis
TSX:SHOP - Toronto Stock Exchange - CA82509L1076 - Common Stock - Currency: CAD
Overall SHOP gets a fundamental rating of 7 out of 10. We evaluated SHOP against 12 industry peers in the IT Services industry. SHOP has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. SHOP is valued quite expensively, but it does show have an excellent growth rating. This makes SHOP very considerable for growth and quality 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.
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
SHOP has a better Return On Assets (14.50%) than 91.67% of its industry peers.
Looking at the Return On Equity, with a value of 17.47%, SHOP belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
SHOP's Return On Invested Capital of 7.27% is amongst the best of the industry. SHOP outperforms 91.67% 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
SHOP has a Profit Margin of 22.74%. This is amongst the best in the industry. SHOP outperforms 100.00% of its industry peers.
SHOP's Profit Margin has declined in the last couple of years.
SHOP has a Operating Margin of 12.11%. This is amongst the best in the industry. SHOP outperforms 91.67% of its industry peers.
In the last couple of years the Operating Margin of SHOP has grown nicely.
SHOP has a better Gross Margin (50.36%) than 66.67% of its industry peers.
SHOP's Gross Margin has declined in the last couple of years.
| 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.
The number of shares outstanding for SHOP has been increased compared to 5 years ago.
Compared to 1 year ago, SHOP has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 33.88 indicates that SHOP is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 33.88, SHOP belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
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 | 33.88 |
ROIC/WACC0.94
WACC7.75%
2.3 Liquidity
A Current Ratio of 3.71 indicates that SHOP has no problem at all paying its short term obligations.
With an excellent Current ratio value of 3.71, SHOP belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
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 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.71 | ||
| Quick Ratio | 3.71 |
3. Growth
3.1 Past
SHOP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 64.38%, which is quite impressive.
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 25.78%.
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
The Earnings Per Share is expected to grow by 20.83% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 21.72% on average over the next years. This is a very strong growth
EPS Next Y24.77%
EPS Next 2Y26.35%
EPS Next 3Y30.68%
EPS Next 5Y20.83%
Revenue Next Year23.62%
Revenue Next 2Y22.19%
Revenue Next 3Y22.46%
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
With a Price/Earnings ratio of 81.84, SHOP can be considered very expensive at the moment.
Based on the Price/Earnings ratio, SHOP is valued a bit cheaper than 75.00% of the companies in the same industry.
SHOP is valuated expensively when we compare the Price/Earnings ratio to 28.10, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 65.72, SHOP can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, SHOP is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 20.74. SHOP is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 81.84 | ||
| Fwd PE | 65.72 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as SHOP.
The rest of the industry has a similar Price/Free Cash Flow ratio as SHOP.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 79.92 | ||
| EV/EBITDA | 107.19 |
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.
A more expensive valuation may be justified as SHOP's earnings are expected to grow with 30.68% in the coming years.
PEG (NY)3.3
PEG (5Y)1.17
EPS Next 2Y26.35%
EPS Next 3Y30.68%
5. Dividend
5.1 Amount
No dividends for SHOP!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:SHOP (5/5/2025, 7:00:00 PM)
135.85
-1.16 (-0.85%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners71.95%
Inst Owner ChangeN/A
Ins Owners0.21%
Ins Owner ChangeN/A
Market Cap176.20B
Analysts76.98
Price Target172.79 (27.19%)
Short Float %N/A
Short RatioN/A
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)-10.83%
PT rev (3m)-1.42%
EPS NQ rev (1m)-0.76%
EPS NQ rev (3m)-6.96%
EPS NY rev (1m)-1.59%
EPS NY rev (3m)-3.59%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.59%
Revenue NY rev (1m)-0.49%
Revenue NY rev (3m)0.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 81.84 | ||
| Fwd PE | 65.72 | ||
| P/S | 14.37 | ||
| P/FCF | 79.92 | ||
| P/OCF | 78.98 | ||
| P/B | 11.04 | ||
| P/tB | 11.51 | ||
| EV/EBITDA | 107.19 |
EPS(TTM)1.66
EY1.22%
EPS(NY)2.07
Fwd EY1.52%
FCF(TTM)1.7
FCFY1.25%
OCF(TTM)1.72
OCFY1.27%
SpS9.45
BVpS12.3
TBVpS11.8
PEG (NY)3.3
PEG (5Y)1.17
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 | 33.88 |
F-Score6
WACC7.75%
ROIC/WACC0.94
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 Y24.77%
EPS Next 2Y26.35%
EPS Next 3Y30.68%
EPS Next 5Y20.83%
Revenue 1Y (TTM)25.78%
Revenue growth 3Y24.41%
Revenue growth 5Y41.27%
Sales Q2Q%31.16%
Revenue Next Year23.62%
Revenue Next 2Y22.19%
Revenue Next 3Y22.46%
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%