SHOPIFY INC - CLASS A (SHOP.CA) Stock Fundamental Analysis
TSX:SHOP - Toronto Stock Exchange - CA82509L1076 - Common Stock - Currency: CAD
Taking everything into account, SHOP scores 7 out of 10 in our fundamental rating. 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 not priced too expensively while it is growing strongly. Keep and eye on this one! This makes SHOP very considerable 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
Looking at the Return On Assets, with a value of 12.01%, SHOP belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
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's Profit Margin of 17.17% is amongst the best of the industry. SHOP outperforms 100.00% of its industry peers.
SHOP's Profit Margin has declined in the last couple of years.
The Operating Margin of SHOP (12.71%) is better than 91.67% 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 66.67% of the companies in the same industry.
SHOP's Gross Margin has declined in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), SHOP is creating some value.
The number of shares outstanding for SHOP has been increased compared to 1 year ago.
Compared to 5 years ago, SHOP has more shares outstanding
The debt/assets ratio for SHOP has been reduced compared to a year ago.
2.2 Solvency
SHOP has an Altman-Z score of 42.14. This indicates that SHOP is financially healthy and has little risk of bankruptcy at the moment.
SHOP's Altman-Z score of 42.14 is amongst the best of the industry. SHOP outperforms 100.00% of its industry peers.
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 | 42.14 |
ROIC/WACC1.07
WACC7.92%
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.
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
The Earnings Per Share has grown by an impressive 35.87% over the past year.
The Earnings Per Share has been growing by 70.21% on average over the past years. This is a very strong growth
The Revenue has grown by 26.52% in the past year. This is a very strong growth!
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 Y19.67%
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
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
The Price/Earnings ratio is 94.58, which means the current valuation is very expensive for SHOP.
75.00% of the companies in the same industry are more expensive than SHOP, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of SHOP to the average of the S&P500 Index (26.82), we can say SHOP is valued expensively.
SHOP is valuated quite expensively with a Price/Forward Earnings ratio of 64.90.
75.00% of the companies in the same industry are more expensive than SHOP, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.21, SHOP is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 94.58 | ||
| Fwd PE | 64.9 |
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.
Based on the Price/Free Cash Flow ratio, SHOP is valued a bit cheaper than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 88.79 | ||
| EV/EBITDA | 122.35 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
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)4.81
PEG (5Y)1.35
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 (8/1/2025, 7:00:00 PM)
163.63
-5.74 (-3.39%)
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 Cap212.29B
Analysts77.09
Price Target160.63 (-1.83%)
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)0.83%
PT rev (3m)-7.03%
EPS NQ rev (1m)-0.22%
EPS NQ rev (3m)-10.75%
EPS NY rev (1m)0.03%
EPS NY rev (3m)-4.09%
Revenue NQ rev (1m)0.12%
Revenue NQ rev (3m)0.5%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 94.58 | ||
| Fwd PE | 64.9 | ||
| P/S | 16.36 | ||
| P/FCF | 88.79 | ||
| P/OCF | 87.92 | ||
| P/B | 13.88 | ||
| P/tB | 14.58 | ||
| EV/EBITDA | 122.35 |
EPS(TTM)1.73
EY1.06%
EPS(NY)2.52
Fwd EY1.54%
FCF(TTM)1.84
FCFY1.13%
OCF(TTM)1.86
OCFY1.14%
SpS10
BVpS11.79
TBVpS11.22
PEG (NY)4.81
PEG (5Y)1.35
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 | 42.14 |
F-Score6
WACC7.92%
ROIC/WACC1.07
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%