SHOPIFY INC - CLASS A (SHOP) Stock Fundamental Analysis
NASDAQ:SHOP - Nasdaq - CA82509L1076 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to SHOP. SHOP was compared to 82 industry peers in the IT Services industry. While SHOP has a great health rating, its profitability is only average at the moment. SHOP is valued quite expensive, but it does show an excellent growth. With these ratings, SHOP could be worth investigating further for growth investing!.
1. Profitability
1.1 Basic Checks
SHOP had positive earnings in the past year.
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 90.24% of the companies in the same industry.
With a decent Return On Equity value of 14.57%, SHOP is doing good in the industry, outperforming 73.17% of the companies in the same industry.
SHOP's Return On Invested Capital of 8.47% is fine compared to the rest of the industry. SHOP outperforms 69.51% 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
Looking at the Profit Margin, with a value of 17.17%, SHOP belongs to the top of the industry, outperforming 95.12% of the companies in the same industry.
SHOP's Profit Margin has declined in the last couple of years.
SHOP has a Operating Margin of 12.71%. This is in the better half of the industry: SHOP outperforms 74.39% of its industry peers.
In the last couple of years the Operating Margin of SHOP has grown nicely.
SHOP has a better Gross Margin (49.94%) than 69.51% 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), SHOP is creating some value.
Compared to 1 year ago, SHOP has more shares outstanding
SHOP has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, SHOP has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 37.30 indicates that SHOP is not in any danger for bankruptcy at the moment.
SHOP's Altman-Z score of 37.30 is amongst the best of the industry. SHOP outperforms 98.78% 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 | 37.3 |
ROIC/WACC1.05
WACC8.09%
2.3 Liquidity
A Current Ratio of 3.71 indicates that SHOP has no problem at all paying its short term obligations.
SHOP's Current ratio of 3.71 is amongst the best of the industry. SHOP outperforms 89.02% of its industry peers.
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.
The Quick ratio of SHOP (3.71) is better than 89.02% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.71 | ||
| Quick Ratio | 3.71 |
3. Growth
3.1 Past
SHOP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 35.87%, which is quite impressive.
The Earnings Per Share has been growing by 70.21% on average over the past years. This is a very strong growth
Looking at the last year, SHOP shows a very strong growth in Revenue. The Revenue has grown by 26.52%.
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.
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 Y19.52%
EPS Next 2Y23.27%
EPS Next 3Y25.57%
EPS Next 5Y20.47%
Revenue Next Year23.68%
Revenue Next 2Y21.7%
Revenue Next 3Y21.1%
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.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 88.21, SHOP can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of SHOP is on the same level as its industry peers.
SHOP's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.59.
SHOP is valuated quite expensively with a Price/Forward Earnings ratio of 60.46.
The rest of the industry has a similar Price/Forward Earnings ratio as SHOP.
SHOP is valuated expensively when we compare the Price/Forward Earnings ratio to 22.39, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 88.21 | ||
| Fwd PE | 60.46 |
4.2 Price Multiples
SHOP's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. SHOP is more expensive than 67.07% of the companies in the same industry.
SHOP's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 82.78 | ||
| EV/EBITDA | 106.9 |
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 25.57% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.52
PEG (5Y)1.26
EPS Next 2Y23.27%
EPS Next 3Y25.57%
5. Dividend
5.1 Amount
No dividends for SHOP!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
110.26
+2.46 (+2.28%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners71.95%
Inst Owner Change2.06%
Ins Owners0.21%
Ins Owner ChangeN/A
Market Cap143.05B
Analysts77.09
Price Target115.93 (5.14%)
Short Float %1.54%
Short Ratio1.31
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)-7.25%
PT rev (3m)-14.66%
EPS NQ rev (1m)-10.55%
EPS NQ rev (3m)-10.55%
EPS NY rev (1m)-4.21%
EPS NY rev (3m)-6.44%
Revenue NQ rev (1m)0.39%
Revenue NQ rev (3m)0.46%
Revenue NY rev (1m)0.39%
Revenue NY rev (3m)-0.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 88.21 | ||
| Fwd PE | 60.46 | ||
| P/S | 15.25 | ||
| P/FCF | 82.78 | ||
| P/OCF | 81.98 | ||
| P/B | 12.94 | ||
| P/tB | 13.6 | ||
| EV/EBITDA | 106.9 |
EPS(TTM)1.25
EY1.13%
EPS(NY)1.82
Fwd EY1.65%
FCF(TTM)1.33
FCFY1.21%
OCF(TTM)1.35
OCFY1.22%
SpS7.23
BVpS8.52
TBVpS8.11
PEG (NY)4.52
PEG (5Y)1.26
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 | 37.3 |
F-Score6
WACC8.09%
ROIC/WACC1.05
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 5Y20.47%
Revenue 1Y (TTM)26.52%
Revenue growth 3Y24.41%
Revenue growth 5Y41.27%
Sales Q2Q%26.81%
Revenue Next Year23.68%
Revenue Next 2Y21.7%
Revenue Next 3Y21.1%
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%