SHOPIFY INC - CLASS A (SHOP.CA) Stock Fundamental Analysis
TSX:SHOP - Toronto Stock Exchange - CA82509L1076 - Common Stock - Currency: CAD
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 priced too expensively while it is growing strongly. Keep and eye on this one! 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.
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
SHOP has a Return On Assets of 12.01%. This is amongst the best in the industry. SHOP outperforms 92.31% of its industry peers.
SHOP's Return On Equity of 14.57% is amongst the best of the industry. SHOP outperforms 92.31% of its industry peers.
The Return On Invested Capital of SHOP (8.47%) is better than 92.31% of its industry peers.
| 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.
SHOP's Profit Margin has declined in the last couple of years.
SHOP's Operating Margin of 12.71% 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.
SHOP has a Gross Margin of 49.94%. This is in the better half of the industry: SHOP outperforms 69.23% of its industry peers.
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so SHOP is still 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 37.11. This indicates that SHOP is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 37.11, 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 | 37.11 |
ROIC/WACC1
WACC8.44%
2.3 Liquidity
A Current Ratio of 3.71 indicates that SHOP has no problem at all paying 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.
A Quick Ratio of 3.71 indicates that SHOP has no problem at all paying its short term obligations.
The Quick ratio of SHOP (3.71) is better than 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.
Measured over the past years, SHOP shows a very strong growth in Earnings Per Share. The EPS has been growing by 70.21% on average per year.
SHOP shows a strong growth in Revenue. In the last year, the Revenue has grown by 26.52%.
The Revenue has been growing by 41.27% on average over the past years. This is a very strong growth!
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
SHOP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.83% yearly.
SHOP is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 21.72% yearly.
EPS Next Y19.52%
EPS Next 2Y23.27%
EPS Next 3Y25.57%
EPS Next 5Y20.83%
Revenue Next Year23.9%
Revenue Next 2Y22.04%
Revenue Next 3Y22.11%
Revenue Next 5Y21.72%
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
Based on the Price/Earnings ratio of 85.71, the valuation of SHOP can be described as expensive.
SHOP's Price/Earnings ratio is a bit cheaper when compared to the industry. SHOP is cheaper than 76.92% of the companies in the same industry.
SHOP is valuated expensively when we compare the Price/Earnings ratio to 26.20, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 58.80, the valuation of SHOP can be described as expensive.
SHOP's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SHOP is cheaper than 76.92% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.13, SHOP is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 85.71 | ||
| Fwd PE | 58.8 |
4.2 Price Multiples
SHOP's Enterprise Value to EBITDA is on the same level as the industry average.
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 | 80.51 | ||
| EV/EBITDA | 106.3 |
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 25.57% in the coming years.
PEG (NY)4.39
PEG (5Y)1.22
EPS Next 2Y23.27%
EPS Next 3Y25.57%
5. Dividend
5.1 Amount
SHOP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:SHOP (5/28/2025, 7:00:00 PM)
148.28
+0.77 (+0.52%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners71.95%
Inst Owner ChangeN/A
Ins Owners0.21%
Ins Owner ChangeN/A
Market Cap192.38B
Analysts76.98
Price Target168.47 (13.62%)
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)-7.95%
Min EPS beat(2)-11.32%
Max EPS beat(2)-4.59%
EPS beat(4)2
Avg EPS beat(4)9.09%
Min EPS beat(4)-11.32%
Max EPS beat(4)26.33%
EPS beat(8)6
Avg EPS beat(8)37.92%
EPS beat(12)9
Avg EPS beat(12)73.85%
EPS beat(16)11
Avg EPS beat(16)57.33%
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)-13.06%
PT rev (3m)-3.88%
EPS NQ rev (1m)-10.66%
EPS NQ rev (3m)-11.16%
EPS NY rev (1m)-4.21%
EPS NY rev (3m)-6.44%
Revenue NQ rev (1m)0.39%
Revenue NQ rev (3m)0.43%
Revenue NY rev (1m)0.23%
Revenue NY rev (3m)-0.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 85.71 | ||
| Fwd PE | 58.8 | ||
| P/S | 14.83 | ||
| P/FCF | 80.51 | ||
| P/OCF | 79.73 | ||
| P/B | 12.59 | ||
| P/tB | 13.22 | ||
| EV/EBITDA | 106.3 |
EPS(TTM)1.73
EY1.17%
EPS(NY)2.52
Fwd EY1.7%
FCF(TTM)1.84
FCFY1.24%
OCF(TTM)1.86
OCFY1.25%
SpS10
BVpS11.78
TBVpS11.21
PEG (NY)4.39
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 | 37.11 |
F-Score6
WACC8.44%
ROIC/WACC1
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 5Y20.83%
Revenue 1Y (TTM)26.52%
Revenue growth 3Y24.41%
Revenue growth 5Y41.27%
Sales Q2Q%26.81%
Revenue Next Year23.9%
Revenue Next 2Y22.04%
Revenue Next 3Y22.11%
Revenue Next 5Y21.72%
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%