SHOPIFY INC - CLASS A (SHOP) Stock Fundamental Analysis
NASDAQ:SHOP - Nasdaq - CA82509L1076 - Common Stock - Currency: USD
Taking everything into account, SHOP scores 7 out of 10 in our fundamental rating. SHOP was compared to 82 industry peers in the IT Services industry. SHOP is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. SHOP shows excellent growth, but is valued quite expensive already. This makes SHOP very considerable for growth 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.
Of the past 5 years SHOP 4 years had a positive operating cash flow.
1.2 Ratios
SHOP has a Return On Assets of 12.01%. This is amongst the best in the industry. SHOP outperforms 90.24% of its industry peers.
SHOP has a better Return On Equity (14.57%) than 75.61% of its industry peers.
Looking at the Return On Invested Capital, with a value of 8.47%, SHOP is in the better half of the industry, outperforming 70.73% 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
Looking at the Profit Margin, with a value of 17.17%, SHOP belongs to the top of the industry, outperforming 93.90% of the companies in the same industry.
SHOP's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 12.71%, SHOP is in the better half of the industry, outperforming 75.61% of the companies in the same industry.
SHOP's Operating Margin has improved in the last couple of years.
The Gross Margin of SHOP (49.94%) is better than 69.51% 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.
Compared to 1 year ago, SHOP has more shares outstanding
Compared to 5 years ago, SHOP has more shares outstanding
Compared to 1 year ago, SHOP has an improved debt to assets ratio.
2.2 Solvency
SHOP has an Altman-Z score of 36.84. This indicates that SHOP is financially healthy and has little risk of bankruptcy at the moment.
SHOP has a Altman-Z score of 36.84. This is amongst the best in the industry. SHOP outperforms 98.78% 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 | 36.84 |
ROIC/WACC1.04
WACC8.13%
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.
SHOP's Current ratio of 3.71 is amongst the best of the industry. SHOP outperforms 90.24% 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 90.24% 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
SHOP shows a strong growth in Revenue. In the last year, the Revenue has grown by 26.52%.
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 20.83% 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
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.
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
A Price/Earnings ratio of 83.54 indicates a quite expensive valuation of SHOP.
Compared to the rest of the industry, the Price/Earnings ratio of SHOP is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 26.60. SHOP is valued rather expensively when compared to this.
SHOP is valuated quite expensively with a Price/Forward Earnings ratio of 57.26.
The rest of the industry has a similar Price/Forward Earnings ratio as SHOP.
SHOP's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 22.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 83.54 | ||
| Fwd PE | 57.26 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SHOP is valued a bit more expensive than the industry average as 65.85% of the companies are valued more cheaply.
SHOP's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 78.38 | ||
| EV/EBITDA | 105.42 |
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.
SHOP's earnings are expected to grow with 25.57% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.28
PEG (5Y)1.19
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 |
NASDAQ:SHOP (5/21/2025, 11:51:09 AM)
104.425
-2.01 (-1.88%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners71.95%
Inst Owner Change2.07%
Ins Owners0.21%
Ins Owner ChangeN/A
Market Cap135.44B
Analysts76.98
Price Target122.01 (16.84%)
Short Float %1.76%
Short Ratio1.65
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)-10.03%
PT rev (3m)0.06%
EPS NQ rev (1m)-10.74%
EPS NQ rev (3m)-11.24%
EPS NY rev (1m)-4.21%
EPS NY rev (3m)-7.18%
Revenue NQ rev (1m)0.39%
Revenue NQ rev (3m)0.43%
Revenue NY rev (1m)-0.31%
Revenue NY rev (3m)0.83%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 83.54 | ||
| Fwd PE | 57.26 | ||
| P/S | 14.44 | ||
| P/FCF | 78.38 | ||
| P/OCF | 77.62 | ||
| P/B | 12.26 | ||
| P/tB | 12.87 | ||
| EV/EBITDA | 105.42 |
EPS(TTM)1.25
EY1.2%
EPS(NY)1.82
Fwd EY1.75%
FCF(TTM)1.33
FCFY1.28%
OCF(TTM)1.35
OCFY1.29%
SpS7.23
BVpS8.52
TBVpS8.11
PEG (NY)4.28
PEG (5Y)1.19
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 | 36.84 |
F-Score6
WACC8.13%
ROIC/WACC1.04
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 Year40.01%
EBIT Next 3Y38.06%
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%