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 12 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 showing excellent growth while it is valued at reasonable prices. 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.
SHOP had a positive operating cash flow in the past year.
SHOP had positive earnings in 4 of the past 5 years.
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 12.01%, SHOP belongs to the best of the industry, outperforming 91.67% of the companies in the same industry.
SHOP has a Return On Equity of 14.57%. This is amongst the best in the industry. SHOP outperforms 83.33% of its industry peers.
With an excellent Return On Invested Capital value of 8.47%, SHOP belongs to the best 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
The Profit Margin of SHOP (17.17%) is better than 100.00% of its industry peers.
SHOP's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 12.71%, SHOP belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
In the last couple of years the Operating Margin of SHOP has grown nicely.
SHOP's Gross Margin of 49.94% is fine compared to the rest of the industry. SHOP outperforms 66.67% of its industry peers.
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.
Compared to 1 year ago, SHOP has more shares outstanding
SHOP has more shares outstanding than it did 5 years ago.
SHOP has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 44.08 indicates that SHOP is not in any danger for bankruptcy at the moment.
The Altman-Z score of SHOP (44.08) is better than 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 | 0.53 | ||
| Altman-Z | 44.08 |
ROIC/WACC1.03
WACC8.25%
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.
A Quick Ratio of 3.71 indicates that SHOP has no problem at all paying its short term obligations.
SHOP has a Quick ratio of 3.71. This is amongst the best in 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.
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 26.52% in the past year. This is a very strong growth!
Measured over the past years, SHOP shows a very strong growth in Revenue. The Revenue has been growing by 41.27% on average per year.
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 20.47% yearly.
Based on estimates for the next years, SHOP will show a very strong growth in Revenue. The Revenue will grow by 21.39% on average per year.
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
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 102.80, the valuation of SHOP can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of SHOP indicates a somewhat cheap valuation: SHOP is cheaper than 75.00% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of SHOP to the average of the S&P500 Index (27.46), we can say SHOP is valued expensively.
The Price/Forward Earnings ratio is 70.39, 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/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.44, SHOP is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 102.8 | ||
| Fwd PE | 70.39 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as SHOP.
SHOP's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. SHOP is cheaper than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 96.3 | ||
| EV/EBITDA | 128.55 |
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.
A more expensive valuation may be justified as SHOP's earnings are expected to grow with 25.58% in the coming years.
PEG (NY)5.23
PEG (5Y)1.46
EPS Next 2Y23.23%
EPS Next 3Y25.58%
5. Dividend
5.1 Amount
SHOP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:SHOP (7/21/2025, 7:00:00 PM)
175.79
+1.43 (+0.82%)
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 Cap228.07B
Analysts77.09
Price Target160.63 (-8.62%)
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)-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)1.31%
PT rev (3m)-17.11%
EPS NQ rev (1m)0.08%
EPS NQ rev (3m)-10.49%
EPS NY rev (1m)0.03%
EPS NY rev (3m)-4.09%
Revenue NQ rev (1m)0.08%
Revenue NQ rev (3m)0.46%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.43%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 102.8 | ||
| Fwd PE | 70.39 | ||
| P/S | 17.74 | ||
| P/FCF | 96.3 | ||
| P/OCF | 95.36 | ||
| P/B | 15.06 | ||
| P/tB | 15.82 | ||
| EV/EBITDA | 128.55 |
EPS(TTM)1.71
EY0.97%
EPS(NY)2.5
Fwd EY1.42%
FCF(TTM)1.83
FCFY1.04%
OCF(TTM)1.84
OCFY1.05%
SpS9.91
BVpS11.67
TBVpS11.11
PEG (NY)5.23
PEG (5Y)1.46
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 | 44.08 |
F-Score6
WACC8.25%
ROIC/WACC1.03
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%