SHOPIFY INC - CLASS A (SHOP.CA) Stock Fundamental Analysis
Canada - TSX:SHOP - CA82509L1076 - Common Stock
195.4 CAD
-4.56 (-2.28%)
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 could make SHOP a good candidate 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
With an excellent Return On Assets value of 16.10%, SHOP belongs to the best of the industry, outperforming 84.62% of the companies in the same industry.
SHOP has a Return On Equity of 19.34%. This is amongst the best in the industry. SHOP outperforms 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's Profit Margin of 23.42% is amongst the best of the industry. SHOP outperforms 100.00% of its industry peers.
In the last couple of years the Profit Margin of SHOP has declined.
SHOP's Operating Margin of 12.50% is amongst the best of the industry. SHOP outperforms 92.31% of its industry peers.
SHOP's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 49.34%, SHOP is in the better half of the industry, outperforming 76.92% of the companies in the same industry.
SHOP's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.5% | ||
| 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.
Compared to 1 year ago, SHOP has more shares outstanding
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 47.69. This indicates that SHOP is financially healthy and has little risk of bankruptcy at the moment.
SHOP has a Altman-Z score of 47.69. This is amongst the best in 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 | 0.51 | ||
| Altman-Z | 47.69 |
ROIC/WACC0.95
WACC8.53%
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.
Looking at the Current ratio, with a value of 3.85, SHOP belongs to the top of the industry, outperforming 92.31% of the companies in the same industry.
A Quick Ratio of 3.85 indicates that SHOP has no problem at all paying its short term obligations.
SHOP has a Quick ratio of 3.85. This is amongst the best in the industry. SHOP outperforms 92.31% 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.
The Earnings Per Share has been growing by 70.21% on average over the past years. This is a very strong growth
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
The Earnings Per Share is expected to grow by 21.38% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 22.74% on average over the next years. This is a very strong growth
EPS Next Y22.08%
EPS Next 2Y24.17%
EPS Next 3Y25.76%
EPS Next 5Y21.38%
Revenue Next Year27.99%
Revenue Next 2Y25.09%
Revenue Next 3Y23.72%
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
Based on the Price/Earnings ratio of 105.05, the valuation of SHOP can be described as expensive.
Based on the Price/Earnings ratio, SHOP is valued a bit cheaper than the industry average as 69.23% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.32. SHOP is valued rather expensively when compared to this.
Based on the Price/Forward Earnings ratio of 76.01, the valuation of SHOP can be described as expensive.
69.23% 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 22.89, SHOP is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 105.05 | ||
| Fwd PE | 76.01 |
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 | 100.6 | ||
| EV/EBITDA | 138.53 |
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 25.76% in the coming years.
PEG (NY)4.76
PEG (5Y)1.5
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 (9/26/2025, 7:00:00 PM)
195.4
-4.56 (-2.28%)
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 Cap253.95B
Analysts76.07
Price Target222.65 (13.95%)
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)40.71%
PT rev (3m)39.76%
EPS NQ rev (1m)-0.28%
EPS NQ rev (3m)-3.73%
EPS NY rev (1m)0%
EPS NY rev (3m)2.05%
Revenue NQ rev (1m)0.47%
Revenue NQ rev (3m)4.97%
Revenue NY rev (1m)0.3%
Revenue NY rev (3m)3.43%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 105.05 | ||
| Fwd PE | 76.01 | ||
| P/S | 18.25 | ||
| P/FCF | 100.6 | ||
| P/OCF | 99.72 | ||
| P/B | 15.08 | ||
| P/tB | 15.76 | ||
| EV/EBITDA | 138.53 |
EPS(TTM)1.86
EY0.95%
EPS(NY)2.57
Fwd EY1.32%
FCF(TTM)1.94
FCFY0.99%
OCF(TTM)1.96
OCFY1%
SpS10.71
BVpS12.96
TBVpS12.4
PEG (NY)4.76
PEG (5Y)1.5
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 | 47.69 |
F-Score5
WACC8.53%
ROIC/WACC0.95
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 Year27.99%
Revenue Next 2Y25.09%
Revenue Next 3Y23.72%
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%