SHOPIFY INC - CLASS A (SHOP.CA) Stock Fundamental Analysis
Canada - TSX:SHOP - CA82509L1076 - Common Stock
231.35 CAD
+10.42 (+4.72%)
SHOP gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 12 industry peers in the IT Services industry. Both the health and profitability get an excellent rating, making SHOP a very profitable company, without any liquidiy or solvency issues. SHOP is valued quite expensive, but it does show an excellent growth. These ratings could make SHOP a good candidate for growth and quality 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.
SHOP had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 16.10%, SHOP belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
SHOP has a better Return On Equity (19.34%) than 100.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 8.12%, SHOP belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.1% | ||
| ROE | 19.34% | ||
| ROIC | 8.12% |
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 23.42%. 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.
With an excellent Operating Margin value of 12.50%, SHOP belongs to the best of the industry, outperforming 91.67% of the companies in the same industry.
SHOP's Operating Margin has improved in the last couple of years.
The Gross Margin of SHOP (49.34%) is better than 75.00% of its industry peers.
In the last couple of years the Gross Margin of SHOP has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.5% | ||
| PM (TTM) | 23.42% | ||
| GM | 49.34% |
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) 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.
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 54.35. This indicates that SHOP is financially healthy and has little risk of bankruptcy at the moment.
SHOP has a better Altman-Z score (54.35) than 100.00% of its industry peers.
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 | 0.51 | ||
| Altman-Z | 54.35 |
ROIC/WACC0.99
WACC8.2%
2.3 Liquidity
SHOP has a Current Ratio of 3.85. This indicates that SHOP is financially healthy and has no problem in meeting its short term obligations.
SHOP has a Current ratio of 3.85. This is amongst the best in the industry. SHOP outperforms 91.67% of its industry peers.
SHOP has a Quick Ratio of 3.85. This indicates that SHOP is financially healthy and has no problem in meeting its short term obligations.
SHOP has a better Quick ratio (3.85) than 91.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.85 | ||
| Quick Ratio | 3.85 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 28.85% 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 28.98%.
SHOP shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 41.27% yearly.
EPS 1Y (TTM)28.85%
EPS 3Y23.18%
EPS 5Y70.21%
EPS Q2Q%34.62%
Revenue 1Y (TTM)28.98%
Revenue growth 3Y24.41%
Revenue growth 5Y41.27%
Sales Q2Q%31.05%
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.
SHOP is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 22.74% yearly.
EPS Next Y21.25%
EPS Next 2Y23.99%
EPS Next 3Y25.39%
EPS Next 5Y21.38%
Revenue Next Year28.03%
Revenue Next 2Y25.14%
Revenue Next 3Y23.74%
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
SHOP is valuated quite expensively with a Price/Earnings ratio of 123.06.
Based on the Price/Earnings ratio, SHOP is valued a bit cheaper than 75.00% of the companies in the same industry.
SHOP's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.69.
A Price/Forward Earnings ratio of 89.29 indicates a quite expensive valuation of SHOP.
SHOP's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SHOP is cheaper than 66.67% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.18, SHOP is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 123.06 | ||
| Fwd PE | 89.29 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SHOP is on the same level as its industry peers.
SHOP's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 117.83 | ||
| EV/EBITDA | 159.6 |
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 25.39% in the coming years.
PEG (NY)5.79
PEG (5Y)1.75
EPS Next 2Y23.99%
EPS Next 3Y25.39%
5. Dividend
5.1 Amount
No dividends for SHOP!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:SHOP (10/20/2025, 7:00:00 PM)
231.35
+10.42 (+4.72%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners74.51%
Inst Owner ChangeN/A
Ins Owners0.1%
Ins Owner ChangeN/A
Market Cap300.68B
Analysts76.07
Price Target226.28 (-2.19%)
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)6.62%
Min EPS beat(2)-5.73%
Max EPS beat(2)18.96%
EPS beat(4)2
Avg EPS beat(4)7.06%
Min EPS beat(4)-11.32%
Max EPS beat(4)26.33%
EPS beat(8)6
Avg EPS beat(8)18.35%
EPS beat(12)10
Avg EPS beat(12)96.64%
EPS beat(16)11
Avg EPS beat(16)50.51%
Revenue beat(2)1
Avg Revenue beat(2)1.2%
Min Revenue beat(2)-0.72%
Max Revenue beat(2)3.12%
Revenue beat(4)3
Avg Revenue beat(4)0.9%
Min Revenue beat(4)-0.72%
Max Revenue beat(4)3.12%
Revenue beat(8)5
Avg Revenue beat(8)0.48%
Revenue beat(12)9
Avg Revenue beat(12)1.06%
Revenue beat(16)10
Avg Revenue beat(16)0.03%
PT rev (1m)1.63%
PT rev (3m)40.87%
EPS NQ rev (1m)0.65%
EPS NQ rev (3m)-3.26%
EPS NY rev (1m)-0.68%
EPS NY rev (3m)1.33%
Revenue NQ rev (1m)0.11%
Revenue NQ rev (3m)5.04%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)3.46%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 123.06 | ||
| Fwd PE | 89.29 | ||
| P/S | 21.38 | ||
| P/FCF | 117.83 | ||
| P/OCF | 116.8 | ||
| P/B | 17.66 | ||
| P/tB | 18.46 | ||
| EV/EBITDA | 159.6 |
EPS(TTM)1.88
EY0.81%
EPS(NY)2.59
Fwd EY1.12%
FCF(TTM)1.96
FCFY0.85%
OCF(TTM)1.98
OCFY0.86%
SpS10.82
BVpS13.1
TBVpS12.53
PEG (NY)5.79
PEG (5Y)1.75
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.1% | ||
| ROE | 19.34% | ||
| ROCE | 10.03% | ||
| ROIC | 8.12% | ||
| ROICexc | 15.22% | ||
| ROICexgc | 16.52% | ||
| OM | 12.5% | ||
| PM (TTM) | 23.42% | ||
| GM | 49.34% | ||
| FCFM | 18.14% |
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-Score5
Asset Turnover0.69
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.51 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 50% | ||
| Cap/Sales | 0.16% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 142.76% | ||
| Profit Quality | 77.48% | ||
| Current Ratio | 3.85 | ||
| Quick Ratio | 3.85 | ||
| Altman-Z | 54.35 |
F-Score5
WACC8.2%
ROIC/WACC0.99
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)28.85%
EPS 3Y23.18%
EPS 5Y70.21%
EPS Q2Q%34.62%
EPS Next Y21.25%
EPS Next 2Y23.99%
EPS Next 3Y25.39%
EPS Next 5Y21.38%
Revenue 1Y (TTM)28.98%
Revenue growth 3Y24.41%
Revenue growth 5Y41.27%
Sales Q2Q%31.05%
Revenue Next Year28.03%
Revenue Next 2Y25.14%
Revenue Next 3Y23.74%
Revenue Next 5Y22.74%
EBIT growth 1Y61.34%
EBIT growth 3Y53.23%
EBIT growth 5YN/A
EBIT Next Year32.79%
EBIT Next 3Y33.64%
EBIT Next 5Y38.64%
FCF growth 1Y796.18%
FCF growth 3Y48.78%
FCF growth 5Y186.89%
OCF growth 1Y606.96%
OCF growth 3Y44.49%
OCF growth 5Y87.03%