SHOPIFY INC - CLASS A (SHOP.CA) Stock Fundamental Analysis
TSX:SHOP - Toronto Stock Exchange - CA82509L1076 - Common Stock - Currency: CAD
We assign a fundamental rating of 7 out of 10 to SHOP. SHOP was compared to 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 expensively, but it does show have an excellent growth rating. With these ratings, SHOP could be worth investigating further 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.
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 better Return On Assets (12.01%) than 91.67% of its industry peers.
Looking at the Return On Equity, with a value of 14.57%, SHOP belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 8.47%, SHOP belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
| 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
SHOP has a better Profit Margin (17.17%) than 100.00% of its industry peers.
In the last couple of years the Profit Margin of SHOP has declined.
With an excellent Operating Margin value of 12.71%, 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.
Looking at the Gross Margin, with a value of 49.94%, SHOP is in the better half of the industry, outperforming 66.67% 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so SHOP is still creating some value.
SHOP has more shares outstanding than it did 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
An Altman-Z score of 37.10 indicates that SHOP is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 37.10, SHOP belongs to the top 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 | 0.53 | ||
| Altman-Z | 37.1 |
ROIC/WACC1.04
WACC8.17%
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.
Looking at the Current ratio, with a value of 3.71, SHOP belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
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.
SHOP's Quick ratio of 3.71 is amongst the best of 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 35.87%, 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 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
Based on estimates for the next years, SHOP will show a very strong growth in Earnings Per Share. The EPS will grow by 20.47% on average per year.
The Revenue is expected to grow by 21.39% on average over the next years. This is a very strong growth
EPS Next Y19.52%
EPS Next 2Y23.27%
EPS Next 3Y25.57%
EPS Next 5Y20.47%
Revenue Next Year23.68%
Revenue Next 2Y21.7%
Revenue Next 3Y21.1%
Revenue Next 5Y21.39%
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
A Price/Earnings ratio of 85.45 indicates a quite expensive valuation of SHOP.
Based on the Price/Earnings ratio, SHOP is valued a bit cheaper than 66.67% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.34, SHOP is valued quite expensively.
A Price/Forward Earnings ratio of 58.74 indicates a quite expensive valuation of SHOP.
Based on the Price/Forward 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/Forward Earnings ratio to 22.19, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 85.45 | ||
| Fwd PE | 58.74 |
4.2 Price Multiples
SHOP's Enterprise Value to EBITDA ratio is in line with the industry average.
SHOP's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 80.42 | ||
| EV/EBITDA | 106.26 |
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.
SHOP's earnings are expected to grow with 25.57% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.38
PEG (5Y)1.22
EPS Next 2Y23.27%
EPS Next 3Y25.57%
5. Dividend
5.1 Amount
No dividends for SHOP!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:SHOP (6/18/2025, 7:00:00 PM)
145.27
-0.11 (-0.08%)
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 Cap188.47B
Analysts77.09
Price Target158.56 (9.15%)
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)-5.89%
PT rev (3m)-19.33%
EPS NQ rev (1m)0.21%
EPS NQ rev (3m)-10.55%
EPS NY rev (1m)0%
EPS NY rev (3m)-6.44%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.46%
Revenue NY rev (1m)-0.17%
Revenue NY rev (3m)-0.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 85.45 | ||
| Fwd PE | 58.74 | ||
| P/S | 14.82 | ||
| P/FCF | 80.42 | ||
| P/OCF | 79.64 | ||
| P/B | 12.58 | ||
| P/tB | 13.21 | ||
| EV/EBITDA | 106.26 |
EPS(TTM)1.7
EY1.17%
EPS(NY)2.47
Fwd EY1.7%
FCF(TTM)1.81
FCFY1.24%
OCF(TTM)1.82
OCFY1.26%
SpS9.8
BVpS11.55
TBVpS11
PEG (NY)4.38
PEG (5Y)1.22
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 | 37.1 |
F-Score6
WACC8.17%
ROIC/WACC1.04
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 Y19.52%
EPS Next 2Y23.27%
EPS Next 3Y25.57%
EPS Next 5Y20.47%
Revenue 1Y (TTM)26.52%
Revenue growth 3Y24.41%
Revenue growth 5Y41.27%
Sales Q2Q%26.81%
Revenue Next Year23.68%
Revenue Next 2Y21.7%
Revenue Next 3Y21.1%
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%