SHOPIFY INC - CLASS A (SHOP) Stock Fundamental Analysis
NASDAQ:SHOP - Nasdaq - CA82509L1076 - Common Stock - Currency: USD
Overall SHOP gets a fundamental rating of 7 out of 10. We evaluated SHOP against 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. These ratings could make SHOP a good candidate 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.
Of the past 5 years SHOP 4 years were profitable.
Of the past 5 years SHOP 4 years had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 12.01%, SHOP belongs to the best 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.
With a decent Return On Invested Capital value of 8.47%, SHOP is doing good in the industry, outperforming 69.51% 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
SHOP has a Profit Margin of 17.17%. This is amongst the best in the industry. SHOP outperforms 95.12% 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 is in the better half of the industry, outperforming 74.39% of the companies in the same industry.
SHOP's Operating Margin has improved in the last couple of years.
SHOP's Gross Margin of 49.94% is fine compared to the rest of the industry. SHOP outperforms 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.
The number of shares outstanding for SHOP has been increased compared to 1 year ago.
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 42.08 indicates that SHOP is not in any danger for bankruptcy at the moment.
The Altman-Z score of SHOP (42.08) is better than 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 | 42.08 |
ROIC/WACC1.07
WACC7.91%
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 has a better Current ratio (3.71) than 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.
Looking at the Quick ratio, with a value of 3.71, SHOP belongs to the top of the industry, outperforming 89.02% of the companies in the same industry.
| 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.
SHOP shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 70.21% yearly.
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
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.
The Revenue is expected to grow by 21.39% on average over the next years. This is a very strong growth
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.
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
SHOP is valuated quite expensively with a Price/Earnings ratio of 94.88.
SHOP's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 26.82. SHOP is valued rather expensively when compared to this.
SHOP is valuated quite expensively with a Price/Forward Earnings ratio of 65.09.
SHOP's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.21, SHOP is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 94.88 | ||
| Fwd PE | 65.09 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SHOP indicates a slightly more expensive valuation: SHOP is more expensive than 69.51% of the companies listed in the same industry.
SHOP's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 89.04 | ||
| EV/EBITDA | 122.15 |
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.
SHOP's earnings are expected to grow with 25.58% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.82
PEG (5Y)1.35
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 |
118.6
-3.61 (-2.95%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners75.42%
Inst Owner Change0.26%
Ins Owners0.1%
Ins Owner ChangeN/A
Market Cap153.87B
Analysts77.09
Price Target117.07 (-1.29%)
Short Float %2.17%
Short Ratio2.71
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)0.74%
PT rev (3m)-6.34%
EPS NQ rev (1m)-0.22%
EPS NQ rev (3m)-10.75%
EPS NY rev (1m)0.03%
EPS NY rev (3m)-4.09%
Revenue NQ rev (1m)0.12%
Revenue NQ rev (3m)0.5%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 94.88 | ||
| Fwd PE | 65.09 | ||
| P/S | 16.41 | ||
| P/FCF | 89.04 | ||
| P/OCF | 88.18 | ||
| P/B | 13.92 | ||
| P/tB | 14.62 | ||
| EV/EBITDA | 122.15 |
EPS(TTM)1.25
EY1.05%
EPS(NY)1.82
Fwd EY1.54%
FCF(TTM)1.33
FCFY1.12%
OCF(TTM)1.35
OCFY1.13%
SpS7.23
BVpS8.52
TBVpS8.11
PEG (NY)4.82
PEG (5Y)1.35
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 | 42.08 |
F-Score6
WACC7.91%
ROIC/WACC1.07
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%