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 81 industry peers in the IT Services industry. SHOP has an excellent financial health rating, but there are some minor concerns on its profitability. SHOP shows excellent growth, but is valued quite expensive already. These ratings would make SHOP suitable for growth investing!
1. Profitability
1.1 Basic Checks
In the past year SHOP was profitable.
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
With an excellent Return On Assets value of 12.01%, SHOP belongs to the best of the industry, outperforming 90.12% of the companies in the same industry.
SHOP has a better Return On Equity (14.57%) than 72.84% 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 70.37% 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 better Profit Margin (17.17%) than 95.06% 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 74.07% of the companies in the same industry.
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 69.14% 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
SHOP has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
SHOP has more shares outstanding than it did 1 year ago.
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 39.80. This indicates that SHOP is financially healthy and has little risk of bankruptcy at the moment.
SHOP's Altman-Z score of 39.80 is amongst the best of the industry. SHOP outperforms 98.77% 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 | 39.8 |
ROIC/WACC1.04
WACC8.15%
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 88.89% 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 88.89% 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.
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%.
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
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.
SHOP is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 21.39% yearly.
EPS Next Y19.63%
EPS Next 2Y23.2%
EPS Next 3Y25.55%
EPS Next 5Y20.47%
Revenue Next Year23.74%
Revenue Next 2Y21.79%
Revenue Next 3Y21.07%
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 90.14.
SHOP's Price/Earnings is on the same level as the industry average.
SHOP is valuated expensively when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
SHOP is valuated quite expensively with a Price/Forward Earnings ratio of 61.86.
SHOP's Price/Forward Earnings is on the same level as the industry average.
SHOP is valuated expensively when we compare the Price/Forward Earnings ratio to 21.70, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 90.14 | ||
| Fwd PE | 61.86 |
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 66.67% 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 | 84.59 | ||
| EV/EBITDA | 114.89 |
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 25.55% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.59
PEG (5Y)1.28
EPS Next 2Y23.2%
EPS Next 3Y25.55%
5. Dividend
5.1 Amount
SHOP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
112.67
-2.68 (-2.32%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners75.42%
Inst Owner Change2.06%
Ins Owners0.1%
Ins Owner ChangeN/A
Market Cap146.18B
Analysts77.09
Price Target116.21 (3.14%)
Short Float %2.3%
Short Ratio2.33
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)-4.75%
PT rev (3m)-14.31%
EPS NQ rev (1m)0.11%
EPS NQ rev (3m)-10.55%
EPS NY rev (1m)0.09%
EPS NY rev (3m)-5.65%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.46%
Revenue NY rev (1m)-0.13%
Revenue NY rev (3m)-0.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 90.14 | ||
| Fwd PE | 61.86 | ||
| P/S | 15.59 | ||
| P/FCF | 84.59 | ||
| P/OCF | 83.77 | ||
| P/B | 13.23 | ||
| P/tB | 13.89 | ||
| EV/EBITDA | 114.89 |
EPS(TTM)1.25
EY1.11%
EPS(NY)1.82
Fwd EY1.62%
FCF(TTM)1.33
FCFY1.18%
OCF(TTM)1.35
OCFY1.19%
SpS7.23
BVpS8.52
TBVpS8.11
PEG (NY)4.59
PEG (5Y)1.28
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 | 39.8 |
F-Score6
WACC8.15%
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 Y19.63%
EPS Next 2Y23.2%
EPS Next 3Y25.55%
EPS Next 5Y20.47%
Revenue 1Y (TTM)26.52%
Revenue growth 3Y24.41%
Revenue growth 5Y41.27%
Sales Q2Q%26.81%
Revenue Next Year23.74%
Revenue Next 2Y21.79%
Revenue Next 3Y21.07%
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%