SHOPIFY INC - CLASS A (SHOP.CA) Stock Fundamental Analysis
TSX:SHOP - Toronto Stock Exchange - CA82509L1076 - Common Stock - Currency: CAD
SHOP gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 13 industry peers in the IT Services industry. SHOP scores excellent points on both the profitability and health parts. This is a solid base for a good stock. SHOP is not overvalued while it is showing excellent growth. This is an interesting combination. These ratings would make SHOP suitable for growth and quality 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.
Of the past 5 years SHOP 4 years were profitable.
SHOP had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
SHOP has a better Return On Assets (12.01%) than 84.62% of its industry peers.
SHOP has a better Return On Equity (14.57%) than 84.62% of its industry peers.
SHOP has a better Return On Invested Capital (8.47%) than 84.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.01% | ||
| ROE | 14.57% | ||
| ROIC | 8.47% |
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 17.17%, SHOP belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Profit Margin of SHOP has declined.
SHOP has a better Operating Margin (12.71%) than 92.31% of its industry peers.
SHOP's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 49.94%, SHOP is doing good in the industry, outperforming 69.23% 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 | 12.71% | ||
| PM (TTM) | 17.17% | ||
| GM | 49.94% |
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
SHOP has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, SHOP has more shares outstanding
Compared to 5 years ago, SHOP has more shares outstanding
SHOP has a better debt/assets ratio than last year.
2.2 Solvency
SHOP has an Altman-Z score of 38.69. This indicates that SHOP is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 38.69, SHOP belongs to the best of the industry, outperforming 100.00% 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 | 0.53 | ||
| Altman-Z | 38.69 |
ROIC/WACC1.01
WACC8.42%
2.3 Liquidity
A Current Ratio of 3.71 indicates that SHOP has no problem at all paying its short term obligations.
SHOP has a Current ratio of 3.71. This is amongst the best in the industry. SHOP outperforms 100.00% of its industry peers.
SHOP has a Quick Ratio of 3.71. This indicates that SHOP is financially healthy and has no problem in meeting its short term obligations.
With an excellent Quick ratio value of 3.71, SHOP belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
| 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 35.87% over the past year.
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 26.52%.
SHOP shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 41.27% yearly.
EPS 1Y (TTM)35.87%
EPS 3Y23.18%
EPS 5Y70.21%
EPS Q2Q%25%
Revenue 1Y (TTM)26.52%
Revenue growth 3Y24.41%
Revenue growth 5Y41.27%
Sales Q2Q%26.81%
3.2 Future
The Earnings Per Share is expected to grow by 20.47% on average over the next years. This is a very strong growth
SHOP is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 21.39% yearly.
EPS Next Y19.67%
EPS Next 2Y23.23%
EPS Next 3Y25.58%
EPS Next 5Y20.47%
Revenue Next Year23.75%
Revenue Next 2Y21.8%
Revenue Next 3Y21.08%
Revenue Next 5Y21.39%
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.
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
Based on the Price/Earnings ratio of 89.72, the valuation of SHOP can be described as expensive.
Based on the Price/Earnings ratio, SHOP is valued a bit cheaper than 69.23% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.30, SHOP is valued quite expensively.
Based on the Price/Forward Earnings ratio of 61.45, the valuation of SHOP can be described as expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SHOP indicates a somewhat cheap valuation: SHOP is cheaper than 76.92% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.76. SHOP is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 89.72 | ||
| Fwd PE | 61.45 |
4.2 Price Multiples
SHOP's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, SHOP is valued a bit cheaper than 69.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 84.07 | ||
| EV/EBITDA | 111.32 |
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 25.58% in the coming years.
PEG (NY)4.56
PEG (5Y)1.28
EPS Next 2Y23.23%
EPS Next 3Y25.58%
5. Dividend
5.1 Amount
No dividends for SHOP!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:SHOP (7/11/2025, 7:00:00 PM)
153.42
-4.01 (-2.55%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners75.42%
Inst Owner ChangeN/A
Ins Owners0.1%
Ins Owner ChangeN/A
Market Cap199.04B
Analysts77.09
Price Target159.31 (3.84%)
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)0
Avg EPS beat(2)-8.53%
Min EPS beat(2)-11.32%
Max EPS beat(2)-5.73%
EPS beat(4)2
Avg EPS beat(4)8.81%
Min EPS beat(4)-11.32%
Max EPS beat(4)26.33%
EPS beat(8)6
Avg EPS beat(8)37.77%
EPS beat(12)9
Avg EPS beat(12)73.76%
EPS beat(16)11
Avg EPS beat(16)57.26%
Revenue beat(2)1
Avg Revenue beat(2)0.13%
Min Revenue beat(2)-0.72%
Max Revenue beat(2)0.97%
Revenue beat(4)2
Avg Revenue beat(4)0.04%
Min Revenue beat(4)-0.72%
Max Revenue beat(4)0.97%
Revenue beat(8)5
Avg Revenue beat(8)0.37%
Revenue beat(12)8
Avg Revenue beat(12)0.42%
Revenue beat(16)10
Avg Revenue beat(16)0.15%
PT rev (1m)0.48%
PT rev (3m)-17.79%
EPS NQ rev (1m)0.08%
EPS NQ rev (3m)-10.49%
EPS NY rev (1m)0.12%
EPS NY rev (3m)-5.62%
Revenue NQ rev (1m)0.08%
Revenue NQ rev (3m)0.46%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)-0.43%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 89.72 | ||
| Fwd PE | 61.45 | ||
| P/S | 15.49 | ||
| P/FCF | 84.07 | ||
| P/OCF | 83.25 | ||
| P/B | 13.15 | ||
| P/tB | 13.81 | ||
| EV/EBITDA | 111.32 |
EPS(TTM)1.71
EY1.11%
EPS(NY)2.5
Fwd EY1.63%
FCF(TTM)1.82
FCFY1.19%
OCF(TTM)1.84
OCFY1.2%
SpS9.9
BVpS11.67
TBVpS11.11
PEG (NY)4.56
PEG (5Y)1.28
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.01% | ||
| ROE | 14.57% | ||
| ROCE | 10.46% | ||
| ROIC | 8.47% | ||
| ROICexc | 16.43% | ||
| ROICexgc | 18.05% | ||
| OM | 12.71% | ||
| PM (TTM) | 17.17% | ||
| GM | 49.94% | ||
| FCFM | 18.42% |
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 3Y37.8%
ROICexcg 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 Turnover0.7
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.53 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 50% | ||
| Cap/Sales | 0.18% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 142.33% | ||
| Profit Quality | 107.33% | ||
| Current Ratio | 3.71 | ||
| Quick Ratio | 3.71 | ||
| Altman-Z | 38.69 |
F-Score6
WACC8.42%
ROIC/WACC1.01
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)35.87%
EPS 3Y23.18%
EPS 5Y70.21%
EPS Q2Q%25%
EPS Next Y19.67%
EPS Next 2Y23.23%
EPS Next 3Y25.58%
EPS Next 5Y20.47%
Revenue 1Y (TTM)26.52%
Revenue growth 3Y24.41%
Revenue growth 5Y41.27%
Sales Q2Q%26.81%
Revenue Next Year23.75%
Revenue Next 2Y21.8%
Revenue Next 3Y21.08%
Revenue Next 5Y21.39%
EBIT growth 1Y398.75%
EBIT growth 3Y53.23%
EBIT growth 5YN/A
EBIT Next Year31.02%
EBIT Next 3Y31.74%
EBIT Next 5Y27.97%
FCF growth 1Y5680.31%
FCF growth 3Y48.78%
FCF growth 5Y186.89%
OCF growth 1Y10097.5%
OCF growth 3Y44.49%
OCF growth 5Y87.03%