company background image
SHOP

ShopifyNYSE:SHOP Stock Report

Last Price

US$882.12

Market Cap

US$110.8b

7D

-20.0%

1Y

-26.3%

Updated

21 Jan, 2022

Data

Company Financials +
SHOP fundamental analysis
Snowflake Score
Valuation0/6
Future Growth2/6
Past Performance5/6
Financial Health5/6
Dividends0/6

SHOP Stock Overview

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

Shopify Competitors

GoDaddy

NYSE:GDDY

US$12.0b

Wix.com

NasdaqGS:WIX

US$7.3b

Squarespace

NYSE:SQSP

US$4.0b

BigCommerce Holdings

NasdaqGM:BIGC

US$2.0b

Price History & Performance

Summary of all time highs, changes and price drops for Shopify
Historical stock prices
Current Share PriceUS$882.12
52 Week HighUS$1,762.92
52 Week LowUS$868.75
Beta1.4
1 Month Change-36.34%
3 Month Change-38.13%
1 Year Change-26.29%
3 Year Change441.78%
5 Year Change1,611.53%
Change since IPO3,335.05%

Recent News & Updates

Jan 14

Shopify Really Needs A+ Execution

I recently bought some Shopify stock on the dip, only to sell it a few days later. I thought the stock's selloff made it look attractive, but I later realized that the company's business model will make strong revenue growth increasingly difficult. The big problem is that the company would need absolutely colossal GMV--or a stock price decline--for its price/sales ratio to come down. In this article, I will develop a neutral thesis on SHOP, arguing that it could rise more, but that it will take truly stellar execution.

Jan 08

Shopify: A Bastion Amid Chaos, At A Price

Shopify is growing rapidly and has many competitive advantages serving a large TAM. Shopify appears to have relatively strong fundamentals and reasonable valuation relative to other hyper-growth stocks. Tough comps and high valuations are significant risks.

Dec 21

Shopify: The Future Of Retail

We believe shift from brick-and-mortar to ecommerce is inevitable. As Covid-related shutdowns forced consumers to shop online, their preferences and spending behaviors are changed forever. In this increasingly complex, competitive, and crowded ecommerce landscape, we believe a differentiating factor lies in merchant’s ability to deliver immersive shopping experience to consumers across multi-channels. We believe there’s demand from both consumers and merchants to an alternative ecommerce solution over marketplace, e.g., Amazon. Shopify is well-positioned for the upcoming change to the retail industry. It offers cloud-based software to build integrated retail platform for merchants. And it also offers other valuable ecommerce solutions such as payment system, fulfillment, and shipping. Shopify is trading 40x EV/Sales, this expensive multiple implies market’s expectation of at least $40 billion in annual revenue as the company approaches a mature state (10x TTM). We think the multiple, while expensive, merely scratches the surface of potential addressable market.

Dec 16
With EPS Growth And More, Shopify (NYSE:SHOP) Is Interesting

With EPS Growth And More, Shopify (NYSE:SHOP) Is Interesting

Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story...

Shareholder Returns

SHOPUS ITUS Market
7D-20.0%-6.6%-6.1%
1Y-26.3%-9.4%4.2%

Return vs Industry: SHOP underperformed the US IT industry which returned -6.6% over the past year.

Return vs Market: SHOP underperformed the US Market which returned 6.6% over the past year.

Price Volatility

Is SHOP's price volatile compared to industry and market?
SHOP volatility
SHOP Average Weekly Movement8.2%
IT Industry Average Movement8.2%
Market Average Movement6.7%
10% most volatile stocks in US Market15.6%
10% least volatile stocks in US Market2.4%

Stable Share Price: SHOP is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: SHOP's weekly volatility (8%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20047,000Tobi Lütkehttps://www.shopify.com

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 merchants to run their business in various sales channels, including web and mobile storefronts, physical retail locations, pop-up shops, social media storefronts, native mobile apps, buy buttons, and marketplaces; and enables to manage products and inventory, process orders and payments, fulfill and ship orders, new buyers and build customer relationships, source products, leverage analytics and reporting, and access financing. It also sells custom themes and apps, and registration of domain names.

Shopify Fundamentals Summary

How do Shopify's earnings and revenue compare to its market cap?
SHOP fundamental statistics
Market CapUS$110.79b
Earnings (TTM)US$3.41b
Revenue (TTM)US$4.21b

32.5x

P/E Ratio

26.3x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
SHOP income statement (TTM)
RevenueUS$4.21b
Cost of RevenueUS$1.92b
Gross ProfitUS$2.29b
Expenses-US$1.12b
EarningsUS$3.41b

Last Reported Earnings

Sep 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)27.15
Gross Margin54.47%
Net Profit Margin81.00%
Debt/Equity Ratio8.0%

How did SHOP perform over the long term?

See historical performance and comparison

Valuation

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

32.49x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SHOP ($882.12) is trading above our estimate of fair value ($801.36)

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


Price To Earnings Ratio

PE vs Industry: SHOP's PE Ratio (32.5x) is in line with the US IT industry average.

PE vs Market: SHOP is poor value based on its PE Ratio (32.5x) compared to the US market (16.7x).


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 (9.7x) compared to the US IT industry average (4.3x).


Future Growth

How is Shopify forecast to perform in the next 1 to 3 years based on estimates from 40 analysts?

-11.4%

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 (-11.4% per year).

Earnings vs Market: SHOP's earnings are forecast to decline over the next 3 years (-11.4% per year).

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

Revenue vs Market: SHOP's revenue (25.2% per year) is forecast to grow faster than the US market (9.2% per year).

High Growth Revenue: SHOP's revenue (25.2% 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 (8.2%).


Past Performance

How has Shopify performed over the past 5 years?

88.2%

Historical annual earnings growth


Earnings and Revenue History

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

Growing Profit Margin: SHOP's current net profit margins (81%) are higher than last year (8%).


Past Earnings Growth Analysis

Earnings Trend: SHOP has become profitable over the past 5 years, growing earnings by 88.2% per year.

Accelerating Growth: SHOP's earnings growth over the past year (1636.1%) exceeds its 5-year average (88.2% per year).

Earnings vs Industry: SHOP earnings growth over the past year (1636.1%) exceeded the IT industry 35.8%.


Return on Equity

High ROE: SHOP's Return on Equity (30%) is considered high.


Financial Health

How is Shopify's financial position?


Financial Position Analysis

Short Term Liabilities: SHOP's short term assets ($8.3B) exceed its short term liabilities ($596.6M).

Long Term Liabilities: SHOP's short term assets ($8.3B) exceed its long term liabilities ($1.6B).


Debt to Equity History and Analysis

Debt Level: SHOP has more cash than its total debt.

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 (53.8%).

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?

2.5yrs

Average management tenure


CEO

Tobi Lütke (40 yo)

17.33yrs

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 ($USD15.11M) is above average for companies of similar size in the US market ($USD11.42M).

Compensation vs Earnings: Tobi's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: SHOP's management team is considered experienced (2.5 years average tenure).


Board Members

Experienced Board: SHOP's board of directors are considered experienced (7.1 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 2.3%.


Top Shareholders

Company Information

Shopify Inc.'s 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
  • Implied Market Cap: US$110.795b
  • Shares outstanding: 125.60m
  • Website: https://www.shopify.com

Number of Employees


Location

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

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/01/21 23:51
End of Day Share Price2022/01/21 00:00
Earnings2021/09/30
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.