NYSE:SHOP

Stock Analysis Report

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Market Cap

US$187.2b

Last Updated

2021/07/31 00:36 UTC

Data Sources

Company Financials +

Executive Summary

Shopify Inc., a commerce company, provides a commerce platform and services in Canada, the United States, the United Kingdom, Australia, Latin America, and internationally. More Details


Snowflake Analysis

Excellent balance sheet with acceptable track record.


Similar Companies

Share Price & News

How has Shopify's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SHOP is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: SHOP's weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

-8.7%

SHOP

-0.1%

US IT

0.8%

US Market


1 Year Return

46.5%

SHOP

31.8%

US IT

37.5%

US Market

Return vs Industry: SHOP exceeded the US IT industry which returned 31.8% over the past year.

Return vs Market: SHOP exceeded the US Market which returned 37.5% over the past year.


Shareholder returns

SHOPIndustryMarket
7 Day-8.7%-0.1%0.8%
30 Day2.7%2.5%1.0%
90 Day26.8%5.0%3.8%
1 Year46.5%46.5%33.0%31.8%39.7%37.5%
3 Year957.3%957.3%102.7%96.1%64.4%54.1%
5 Year3,952.8%3,952.8%226.7%203.7%124.9%100.0%

Long-Term Price Volatility Vs. Market

How volatile is Shopify's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Shopify undervalued compared to its fair value and its price relative to the market?

76.31x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SHOP ($1499.93) is trading above our estimate of fair value ($591.73)

Significantly Below Fair Value: SHOP is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SHOP is poor value based on its PE Ratio (76.3x) compared to the US IT industry average (35.7x).

PE vs Market: SHOP is poor value based on its PE Ratio (76.3x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: SHOP's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: SHOP is overvalued based on its PB Ratio (18.5x) compared to the US IT industry average (5.1x).


Future Growth

How is Shopify forecast to perform in the next 1 to 3 years based on estimates from 38 analysts?

-7.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SHOP's earnings are forecast to decline over the next 3 years (-7.5% per year).

Earnings vs Market: SHOP's earnings are forecast to decline over the next 3 years (-7.5% per year).

High Growth Earnings: SHOP's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SHOP's revenue (28.3% per year) is forecast to grow faster than the US market (9.2% per year).

High Growth Revenue: SHOP's revenue (28.3% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SHOP's Return on Equity is forecast to be low in 3 years time (13.2%).


Past Performance

How has Shopify performed over the past 5 years?

82.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SHOP has a high level of non-cash earnings.

Growing Profit Margin: SHOP became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: SHOP has become profitable over the past 5 years, growing earnings by 82.4% per year.

Accelerating Growth: SHOP has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: SHOP has become profitable in the last year, making it difficult to compare its past year earnings growth to the IT industry (18.9%).


Return on Equity

High ROE: SHOP's Return on Equity (24.2%) is considered high.


Financial Health

How is Shopify's financial position?


Financial Position Analysis

Short Term Liabilities: SHOP's short term assets ($8.5B) exceed its short term liabilities ($511.1M).

Long Term Liabilities: SHOP's short term assets ($8.5B) exceed its long term liabilities ($1.3B).


Debt to Equity History and Analysis

Debt Level: SHOP's debt to equity ratio (9%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if SHOP's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: SHOP's debt is well covered by operating cash flow (59%).

Interest Coverage: SHOP earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Dividend

What is Shopify current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate SHOP's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate SHOP's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SHOP's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SHOP's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SHOP's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.2yrs

Average management tenure


CEO

Tobi Lütke (40 yo)

13.17yrs

Tenure

US$15,105,177

Compensation

Mr. Tobias Lütke, also known as Tobi, Co-founded Shopify Inc. in September 2004 and serves as its Chairman. Mr. Lütke has been the Chief Executive Officer of Shopify Inc. since April 2008. Prior to that, h...


CEO Compensation Analysis

Compensation vs Market: Tobi's total compensation ($USD15.11M) is above average for companies of similar size in the US market ($USD11.23M).

Compensation vs Earnings: Tobi's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: SHOP's management team is considered experienced (3.2 years average tenure).


Board Members

Experienced Board: SHOP's board of directors are considered experienced (6.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: SHOP insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.9%.


Top Shareholders

Company Information

Shopify Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Shopify Inc.
  • Ticker: SHOP
  • Exchange: NYSE
  • Founded: 2004
  • Industry: Internet Services and Infrastructure
  • Sector: Software
  • Market Cap: US$187.174b
  • Shares outstanding: 124.79m
  • Website: https://www.shopify.com

Number of Employees


Location

  • Shopify Inc.
  • 151 O'Connor Street
  • Ground floor
  • Ottawa
  • Ontario
  • K2P 2L8
  • Canada

Listings


Biography

Shopify Inc., a commerce company, provides a commerce platform and services in Canada, the United States, the United Kingdom, Australia, Latin America, and internationally. The company’s platform provides ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/07/31 00:36
End of Day Share Price2021/07/30 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.