SHOPIFY INC - CLASS A (SHOP.CA) Stock Fundamental Analysis
TSX:SHOP - CA82509L1076 - Common Stock
203.34 CAD
+2.56 (+1.28%)
We assign a fundamental rating of 7 out of 10 to SHOP. SHOP was compared to 13 industry peers in the IT Services industry. SHOP gets an excellent profitability rating and is at the same time showing great financial health properties. SHOP is not overvalued while it is showing excellent growth. This is an interesting combination. This makes SHOP very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year SHOP was profitable.
SHOP had a positive operating cash flow in the past year.
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
The Return On Assets of SHOP (16.10%) is better than 84.62% of its industry peers.
The Return On Equity of SHOP (19.34%) is better than 92.31% of its industry peers.
SHOP's Return On Invested Capital of 8.12% is amongst the best of the industry. SHOP outperforms 84.62% of its industry peers.
| 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 better Profit Margin (23.42%) than 100.00% of its industry peers.
SHOP's Profit Margin has declined in the last couple of years.
SHOP's Operating Margin of 12.50% is amongst the best of the industry. SHOP outperforms 92.31% of its industry peers.
In the last couple of years the Operating Margin of SHOP has grown nicely.
With a decent Gross Margin value of 49.34%, SHOP is doing good in the industry, outperforming 76.92% 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 | 12.5% | ||
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so 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.
The debt/assets ratio for SHOP has been reduced compared to a year ago.
2.2 Solvency
SHOP has an Altman-Z score of 48.13. This indicates that SHOP is financially healthy and has little risk of bankruptcy at the moment.
SHOP has a Altman-Z score of 48.13. This is amongst the best in the industry. SHOP outperforms 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 | 48.13 |
ROIC/WACC0.99
WACC8.21%
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.
With an excellent Current ratio value of 3.85, SHOP belongs to the best of the industry, outperforming 92.31% of the companies in the same industry.
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 92.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.85 | ||
| Quick Ratio | 3.85 |
3. Growth
3.1 Past
SHOP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 28.85%, 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.
The Revenue has grown by 28.98% in the past year. This is a very strong growth!
The Revenue has been growing by 41.27% on average over the past years. This is a very strong growth!
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.
Based on estimates for the next years, SHOP will show a very strong growth in Revenue. The Revenue will grow by 22.74% on average per year.
EPS Next Y22.08%
EPS Next 2Y24.17%
EPS Next 3Y25.76%
EPS Next 5Y21.38%
Revenue Next Year27.61%
Revenue Next 2Y24.84%
Revenue Next 3Y23.51%
Revenue Next 5Y22.74%
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
The Price/Earnings ratio is 109.91, which means the current valuation is very expensive for SHOP.
Compared to the rest of the industry, the Price/Earnings ratio of SHOP indicates a somewhat cheap valuation: SHOP is cheaper than 69.23% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of SHOP to the average of the S&P500 Index (27.06), we can say SHOP is valued expensively.
With a Price/Forward Earnings ratio of 79.53, SHOP can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SHOP indicates a somewhat cheap valuation: SHOP is cheaper than 69.23% of the companies listed in the same industry.
SHOP is valuated expensively when we compare the Price/Forward Earnings ratio to 22.69, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 109.91 | ||
| Fwd PE | 79.53 |
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.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SHOP indicates a somewhat cheap valuation: SHOP is cheaper than 61.54% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 105.26 | ||
| EV/EBITDA | 139.93 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of SHOP may justify a higher PE ratio.
SHOP's earnings are expected to grow with 25.76% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.98
PEG (5Y)1.57
EPS Next 2Y24.17%
EPS Next 3Y25.76%
5. Dividend
5.1 Amount
No dividends for SHOP!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:SHOP (9/5/2025, 7:00:00 PM)
203.34
+2.56 (+1.28%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners75.49%
Inst Owner ChangeN/A
Ins Owners0.11%
Ins Owner ChangeN/A
Market Cap264.27B
Analysts77.5
Price Target220.75 (8.56%)
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)1.18%
Min Revenue beat(2)-0.72%
Max Revenue beat(2)3.08%
Revenue beat(4)3
Avg Revenue beat(4)0.89%
Min Revenue beat(4)-0.72%
Max Revenue beat(4)3.08%
Revenue beat(8)5
Avg Revenue beat(8)0.47%
Revenue beat(12)9
Avg Revenue beat(12)1.06%
Revenue beat(16)10
Avg Revenue beat(16)0.03%
PT rev (1m)37.42%
PT rev (3m)31.03%
EPS NQ rev (1m)-3.81%
EPS NQ rev (3m)-9.45%
EPS NY rev (1m)2.02%
EPS NY rev (3m)2.14%
Revenue NQ rev (1m)4.78%
Revenue NQ rev (3m)3.92%
Revenue NY rev (1m)3%
Revenue NY rev (3m)3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 109.91 | ||
| Fwd PE | 79.53 | ||
| P/S | 19.1 | ||
| P/FCF | 105.26 | ||
| P/OCF | 104.34 | ||
| P/B | 15.77 | ||
| P/tB | 16.49 | ||
| EV/EBITDA | 139.93 |
EPS(TTM)1.85
EY0.91%
EPS(NY)2.56
Fwd EY1.26%
FCF(TTM)1.93
FCFY0.95%
OCF(TTM)1.95
OCFY0.96%
SpS10.65
BVpS12.89
TBVpS12.33
PEG (NY)4.98
PEG (5Y)1.57
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 | 48.13 |
F-Score5
WACC8.21%
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 Y22.08%
EPS Next 2Y24.17%
EPS Next 3Y25.76%
EPS Next 5Y21.38%
Revenue 1Y (TTM)28.98%
Revenue growth 3Y24.41%
Revenue growth 5Y41.27%
Sales Q2Q%31.05%
Revenue Next Year27.61%
Revenue Next 2Y24.84%
Revenue Next 3Y23.51%
Revenue Next 5Y22.74%
EBIT growth 1Y61.34%
EBIT growth 3Y53.23%
EBIT growth 5YN/A
EBIT Next Year30.54%
EBIT Next 3Y33.18%
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%