company background image
SHOP

Shopify NYSE:SHOP Stock Report

Last Price

US$26.94

Market Cap

US$34.2b

7D

-6.3%

1Y

-80.1%

Updated

02 Oct, 2022

Data

Company Financials +
SHOP fundamental analysis
Snowflake Score
Valuation1/6
Future Growth2/6
Past Performance0/6
Financial Health3/6
Dividends0/6

SHOP Stock Overview

Shopify Inc., a commerce company, provides a commerce platform and services in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, and Latin America.

Shopify Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Shopify
Historical stock prices
Current Share PriceUS$26.94
52 Week HighUS$176.29
52 Week LowUS$26.38
Beta1.82
1 Month Change-10.53%
3 Month Change-14.23%
1 Year Change-80.06%
3 Year Change-17.67%
5 Year Change175.12%
Change since IPO949.07%

Recent News & Updates

Oct 02

Shopify: Down 80%, One Of My Largest Positions

Summary Shopify stock sunk 15% after releasing second quarter earnings results and has kept sinking. Management admits that it has underestimated the post-pandemic reversion to the mean. The company continues to expect no profits this year. Shopify remains a founder-led compounder and is trading at compelling valuations. Shopify (SHOP) sunk 15% after releasing second quarter earnings and has since kept sinking. The stock has plunged amidst the bursting of the tech bubble but the crash is far too overdone. SHOP continues to invest aggressively to support its long term growth outlook, but that will have the effect of wiping out operating profits this year. This is a market that has rewarded companies generating immediate profits with little patience to look over the long term. SHOP is trading at compelling valuations while also representing what I view to be a generational compounder. SHOP Stock Price After peaking at $176 per share (split-adjusted), SHOP is now trading just around $27 per share. Data by YCharts I last covered the stock in June where I discussed the ramifications of the stock split. The stock split has since been completed in late June but that has done little to change the negative sentiment regarding the stock. SHOP Stock Key Metrics SHOP generated 16% revenue growth in the quarter, with GMV growing by only 11%. 2022 Q2 Presentation Management noted that they had previously misassessed just how much the pandemic positively impacted their business. On the conference call, they stated: We expect 2022 will be different, more of a transition year in which e-commerce is largely reset to the pre-COVID trend line and is now pressured by persistent high inflation. The net result is that SHOP made the difficult decision to lay off 10% of its workforce to rectify those missed projections. Management stated: For the remainder of 2022, we expect a slow hiring to only the most strategic, and with the addition of Deliverr, exit this year with only a modest increase in total headcount versus the beginning of 2022. That does not mean that the company will not continue investing aggressively in growth. In fact, SHOP is still guiding for the full-year to see no operating income due to heavy reinvestment - the company had previously generated $269 million of operating income in 2021. Those investments include improving its B2B software - recall that SHOP can be considered an enabler of independent e-commerce. 2022 Q2 Presentation SHOP is also investing in its fulfillment network as it seeks to extend the reach of its 2-day shipping capabilities. 2022 Q2 Presentation

Sep 17

Shopify: The Central Operating System For Business

Summary Shopify is a mission-driven and founder-led company that has beat the stock market since IPO until 2022 started. The current headwinds Shopify is facing are partially self-inflicted because it is investing in growth and playing the long game. The company has an end-to-end business model and ecosystem that merchants can take advantage of to scale and be successful. Shopify’s leadership is aligned with its shareholders' and employees' best interests for success. Thesis I believe Shopify (SHOP) will be a market beating stock over the next five years because of their excellent leadership, business model, and their ecosystem of commerce. In this article we will cover the current state of the business, the risks and valuation, the execution of leadership, and deep dive into their business model which can be the central operating system for merchants, and why that has me bullish on the future of Shopify stock. Current State of the Business Shopify was one of the darlings of the stock market for the past few years until 2022 started. From the beginning of 2018 until the beginning of 2022, Shopify was one of the best returning growth stocks with over 17x in gains. So much has changed in such a short amount of time, with the market cap valuation dropping 75% in just nine short months. So, is this fall from grace warranted? And has the thesis for this stock completely broken, causing the share price to fall off a cliff? Data by YCharts It is true the company went from producing earnings of nearly $880M to -$1.2B a year later. So how did Shopify generate a -$2B swing in earnings in one year? It's a simple answer, Shopify overestimated the growth rates of e-commerce post COVID by hiring too many employees, a war in Ukraine and Russia began, and global inflation incurred. Revenue growth decelerating in 2022 and macro-economic inflation forced the company to have to reduce their workforce by 10%. It is never a pleasant company experience having to let go of employees, but it was fiscally responsible considering they over-hired in anticipation of continued exponential e-commerce growth in 2022. The other cause for the loss in earnings was due to this year, being a year of investment in expansion and growth for the long term. The company committed to expanding their flywheel in their business model by making the biggest acquisition of their history by purchasing global logistics company Deliverr for $2.1B. President of Shopify Harley Finkelstein will share later the value this acquisition adds for the company and the problem it solves for merchants on and off the Shopify platform. So, the question is has Shopify stock been de-risked since going from one of the largest stocks in the market to 75% smaller in market cap size? And can Shopify recover and regain its dominance? The Risks and Valuation The valuation for Shopify has come down significantly with a price multiple of 38 price-to-sales ratio in January 2022 to now a more reasonable 8.5. However, the current stock market is a market that is not in favor of non-profitable, decelerating growth retail companies. In addition to the state of the stock market, inflation has been impacting the spend of the consumer in the United States and globally. This consequently impacts Shopify and the entrepreneurs and SMB merchants utilizing their platform. So, is this company still overvalued against its peers? And is growth and earnings not able to be returned to a level that Shopify experienced before 2022? Data by YCharts If you compare Shopify stock to its peers on a purely price-to-sales ratio it appears more expensive. However, it is more affordable than the stock has ever been, has a much more complete ecosystem and end-to-end business model, and with a much stronger balance sheet. If you are looking for a stock for the short-term beware this is a very volatile one to consider. But for the long-term I fully believe Shopify is primed for expansion and delivering market beating returns for shareholders consistently. Remember, the wise quote from the great investor Benjamin Graham, "In the short run, the market is a voting machine but in the long run, it is a weighing machine." I believe due to the exceptional forward-thinking and strategic leadership of CEO Tobi Lütke and President Harley Finkelstein they will take this company to new all-time highs in the long-term. The Execution of Leadership: Shopify is a founder-led company with Tobi at the helm and Harley has been with the company for nearly 13 years himself. I consider them to be one of the best one-two punches in leadership in the software or e-commerce space. They lead a very mission driven company that has always been extremely aspirational in changing how entrepreneurship and commerce is done. The company's mission statement supports their customer audience's expectations of creating a successful business. Shopify's mission statement reads, "Make commerce better for everyone", and they elaborate on this as follows, "We help people achieve independence by making it easier to start, run, and grow a business. We believe the future of commerce has more voices, not fewer, so we're reducing the barriers to business ownership to make commerce better for everyone." This mission statement is simple, focused, and is something that employees can understand and get behind. The other thing their mission statement creates is the expectation for merchants if they build their business on the Shopify platform, they can focus on what is important and they will be successful. Tobi and Harley have helped build this company around this mission and have been executing to it since going IPO in 2015. Having a well-thought-out company vision and mission statement that aligns to that vision, matters for success. Employees find meaning in their work when they can understand how their work contributes to the larger goal or mission statement. It leads to improved employee retention, productivity, sustainable talent growth within the organization, and attracts new talent. Tobi is fully aligned to shareholders' interest as he owns 6.2% of all shares of the company and is the biggest shareholder overall and has 40% of voting rights in the company. This allows him and Harley to continue to drive the company to their mission and for running the company towards long-term goals. Tobi and the leadership team at Shopify want to give employees that same chance to be even more aligned with the long-term success of the company and merchants, by instituting a new compensation system called Flex Comp, where employees can choose how they are compensated via cash, restricted stock units (RSUs), or options. The ability to withdraw the stock is instantaneously, opposed to waiting a full year and this will give flexibility for employees who may need to save for a large purchase like a house for example, opposed to forcing RSUs as the only additional compensation available. Employees will also receive a 5% bonus if they allocate more money to equity than is required under the minimum 'guard rails' in the program. Shopify Q2 Investor Presentation Now it takes more than just an amazing CEO and President for a company to be a long term-success. It takes great leadership and execution from other parts of the business as well. This leads to the concerns by investors and the media around Shopify since, CFO Amy Shapero is stepping down after nearly 5 years with Shopify and COO Toby Shannan who was with the company for the last 13yrs will not be in role anymore as of a few weeks ago. However, investors need to always examine any news around their holdings with a frame of perspective, "understand the why", and examine it in context. Toby Shannan had been with the company for a very long time and is retiring and will be joining the Board of Directors for Shopify on January 1, 2023. The backfill for Toby is VP of Merchant Services, Kaz Nejatian who has been with Shopify for the last three years. Kaz has also worked previously at Facebook as a Product lead for Payment Platform and Billing teams, as well as creating his own company Kash, which was an alternative payment company which used consumer data to underwrite the risk of transactions, which he later sold that off to a publicly traded financial services company. The CFO replacement for Amy Shapero wasn't a complete outsider as it was Jeff Hoffmeister, who was the banker during the IPO of Shopify. He has helped the company do financing in the past and been and advisor of sorts to Tobi and Harley for years. He brings additional skillsets to the leadership group with his long-standing banking background. So I believe these leadership changes are being over exaggerated by media, as it is not like Toby is leaving the company. Now, that would be a COMPLETELY different story and maybe even a thesis changer. Creating the Central Operating System for Business Tobi and Harley understand that the world is operating in a challenging time right now. They also understand the e-commerce market has gone through a whiplash since pre-COVID and maybe misunderstood. Shopify believes by providing an easy access point of entry into starting your own business and ecosystem of resources, it will level the playing field for all small businesses and all brands. The company believes in a top of the funnel business approach that leads to the most successful merchants becoming large brands and more than making up for any merchants that were to leave the platform.

Sep 08

Shopify hires new finance chief

Shopify (NYSE:SHOP) has made leadership changes, appointing Jeff Hoffmeister as its new CFO and promoting Kaz Nejatian to COO role. Hoffmeister, who currently serves as Managing Director for Morgan Stanley (MS) in their Technology Investment Banking Group, will succeed Amy Shapero at Shopify (SHOP). Shapero will step down following the company's Q3/2022 earnings release scheduled on Oct 27, 2022. Nejatian, who currently serves as Vice President of Product, will take up the COO role, effective immediately. He will succeed Toby Shannan, who will transition to the position of Special Advisor and board member.

Aug 28

Shopify: Simplifying Logistics

Summary Legacy freight processes are often designed for big businesses with large volumes and consistent demand. Shopify and Deliverr are using software and machine learning to unpack, scan and inspect inventory. GMV was just $15.4 billion in 2016 and it grew explosively over the next 5 years to reach $175.4 billion in 2021. Introduction My thesis is that Shopify (SHOP) is helping merchants take some of the complexity out of freight, distribution, fulfillment and delivery. Simplifying Logistics Using their merchant-centric focus, Shopify is implementing an asset-light approach to help simplify logistics - especially for small and medium sized merchants. Freight, distribution and fulfillment/delivery are key steps and Shopify is making progress across the board. In the 1Q22 call, President Harley Finkelstein noted that supply chain management and fulfillment are challenging for merchants. He said Shopify is creating an end-to-end logistics platform that will simplify the process: To actually get an order to a buyer, they have to fumble through a maze of freight providers, 3PLs and middle and last-mile carriers. We know merchants trust Shopify to offer simple, reliable, cost-effective solutions to their biggest problems. That's why we're creating the world's most merchant-obsessed, end-to-end software and logistics platform, fully integrated into the Shopify ecosystem. We are simplifying logistics across every stage of a merchant supply chain, from inventory inbounding to inventory distribution across all merchant channels, to fast and affordable D2C order fulfillment and returns. President Finkelstein went on in the 1Q22 call to announce the acquisition of Deliverr which is accelerating Shopify’s path to an end-to-end merchant supply solution. The 2Q22 presentation explains the ways Shopify is simplifying logistics: simplifying logistics (2Q22 presentation) Freight On the freight side, Shopify has invested in Flexport, a company that helps merchants with inventory inbounding. Dave Clark left a senior management position at Amazon (AMZN) and he’ll soon be the CEO of Flexport starting September 1st. Shopify President Finkelstein breaks down freight in the 2Q22 call, saying merchants need to work with upwards of 10 vendors in a system that is often set up at the container level. Shopify and Flexport have a pilot program together where merchants can ship at the pallet level instead of the container level. Speeds can be up to 50% faster with a lower than average cost per pallet. Flexport is shown as a key part of inventory inbounding in Shopify’s 2Q22 presentation: flexport (2Q22 presentation) Distribution President Finkelstein covers distribution in the 2Q22 call. As inventory arrives in port, independent merchants can have a hard time preparing and routing it for distribution across multiple channels. Shopify closed their acquisition of Deliverr in July in order to accelerate the simplification of the distribution process, starting in Atlanta: The first example of this will be at our Atlanta Hub warehouse. Using software and machine learning, these SFN hubs, leveraging Deliverr's capabilities, will unpack, scan and inspect all inventory, then compare against metadata in Shopify's back office to route the goods to a merchants' various distribution channels as well as forward-position inventory into SFN-spoke direct-to-consumer fulfillment centers based on expected buyer demand. With this software-based approach, Deliverr is helping us expand 2-day delivery across SFN. At the August Canaccord Growth Conference, Senior Manager Ana Raman explains that Deliverr is acting as an accelerant in various channels such as wholesale and brick-and-mortar: So Deliverr is really helping to accelerate a roadmap that we already had planned. Now they're just helping us get there faster. So things like distributing product through channels, so multiple channels. So whether that is B2B wholesale, whether that is brick-and-mortar, whether that is any online channel from marketplaces to social media or the merchant's online store. With their smart inventory placement, we're going to be able to really effectively allocate inventory through the channels The 2Q22 presentation shows how Deliverr helps with distribution: Deliverr (2Q22 presentation) Fulfillment and Delivery In the 2Q22 call, Shopify President Finkelstein explains that the last step in logistics is 2-day fulfillment and delivery. It is the most critical step and in the past it has been hard for merchants to get this right on their own. The numbers show that conversions increase when merchants can promise a delivery window - even if it is up to 3 or 4 days: By leveraging Deliverr software in SFN hubs and SFN Spoke partner warehouses all equipped with 6 River Systems technology, we can forward position merchants inventory to support timely fulfillment with a minimal inventory commitment for merchants. We've also continued our early access to Shop Promise, which lets merchants offer 2-day delivery promises across online storefronts and channels like Google, Facebook and Instagram. Deliverr data suggests that as Shop Promise reaches scale, many merchants will be able to increase average conversion rates by more than 30%. The 2Q22 presentation shows that the “Shop Promise” badge helps merchants give customers peace of mind with respect to delivery timelines: fulfillment (2Q22 presentation) Buy With Prime Much of the information on Amazon’s Buy with Prime program emphasizes the fulfillment and delivery step but we’ve seen that freight and distribution are additional considerations with logistics. In the same way that Amazon third-party (“3P”) is one of many sales channels, I believe Buy with Prime will be one of many logistics channels. A July 18th interview from ModernRetail shines some light on what we can expect from Shopify and Amazon in the coming years. Many investors see Amazon’s Buy with Prime offering as a threat but Shopify logistics leader Aaron Brown’s thoughts on the subject are optimistic: We’re also working with Amazon, every week, right now to integrate the new platform and having super positive discussions. We’re really bullish on the partnership between Amazon and Shopify. The interesting thing with fulfillment is we’re solving for fundamentally different problems. Shopify is trying to provide an end-to-end platform helping a merchant manage their entire supply chain across all channels. One of those channels can be fulfillment by Amazon. If a merchant wants to take all of their inventory in a Shopify SFN cross dock and deploy a quarter of that in FBA, we help them do that. We’re also trying to build a fulfillment solution that’s super integrated into Amazon’s online store, its channels, and very integrated with Shop Promise to help build a really compelling solution. And so we’re really excited about Amazon and the infrastructure they’re creating for independent retailers. Senior Shopify manager Ana Raman answers a question about how significant a threat Buy with Prime is to SFN at the August Canaccord Growth Conference mentioned earlier. The point is made that it is great for merchants if Amazon is coming over their walled gardens and helping independent merchants. Still, Amazon is customer-focused while Shopify is merchant-focused. Amazon is not as good as Shopify in terms of letting merchants own their buyers, channels, data and brand: But we also need to think of this holistically in terms of SFN fulfillment being one piece of the much larger commerce puzzle. And because we are fueling the firewheel for - flywheel from different perspectives, whether that is fulfillment, whether that is finding new buyers or helping them manage their business from their back, and the superpower of fulfillment is tied into the network effects into that flywheel. And so that is an area we're continuing to work on, so that merchants have an end to end commerce experience. We are not just focused on fulfillment. And that is a key area that I hope that investors can take away is that it's really worthwhile to look at Shopify from a much more holistic, the whole is greater than the sum of its parts perspective. Valuation Shopify’s 2021 40-F shows 64.5% of revenue coming from the U.S. and eMarketer shows that in 2021, only 15% of total retail in the U.S. was done online. Shopify will benefit in the coming years as the U.S. increases this percentage to be more like the UK where 28.5% or total retail was online per eMarketer. Commerce keeps moving online in the U.S. and around the world but this doesn’t benefit all companies equally. In the 3Q21 BigCommerce (BIGC) call, CEO Brent Bellm answered a question about the companies they’re displacing. BigCommerce, Shopify and Salesforce (CRM) are all taking customers from on-premise Magento (ADBE) and around 500 other platforms: And the easy thing to say is Magento is by far the biggest donor platform to us. But in aggregate, they're probably - I mean, I don't have the specific figure, they're probably no more than 20% of the mid-market and above migration, an awful lot of custom sites and then a very long tail. I mean we get sites migrating from every other platform that you can imagine, big, small, old, really old. It's really all of them. The point is that as you look forward, SaaS is clearly the future for most merchants. There are 3 leading SaaS platforms. You know those 3: it's us, Shopify and at the high end of the market, Salesforce. And all 3 of us are taking share from the rest of them in addition to competing for net new builds.

Shareholder Returns

SHOPUS ITUS Market
7D-6.3%-2.7%-2.5%
1Y-80.1%-39.1%-23.2%

Return vs Industry: SHOP underperformed the US IT industry which returned -39.1% over the past year.

Return vs Market: SHOP underperformed the US Market which returned -23.2% over the past year.

Price Volatility

Is SHOP's price volatile compared to industry and market?
SHOP volatility
SHOP Average Weekly Movement11.8%
IT Industry Average Movement8.0%
Market Average Movement6.8%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.8%

Stable Share Price: SHOP is more volatile than 75% of US stocks over the past 3 months, typically moving +/- 12% a week.

Volatility Over Time: SHOP's weekly volatility (12%) has been stable over the past year, but is still higher than 75% of US stocks.

About the Company

FoundedEmployeesCEOWebsite
200410,000Tobi Lütkehttps://www.shopify.com

Shopify Inc., a commerce company, provides a commerce platform and services in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company’s platform enables merchants to displays, manages, markets, and sells its products through 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, manage cash, payments and transactions, and access financing. It also sells custom themes and apps, and registration of domain names; and merchant solutions, which include accepting payments, shipping and fulfillment, and securing working capital.

Shopify Fundamentals Summary

How do Shopify's earnings and revenue compare to its market cap?
SHOP fundamental statistics
Market CapUS$34.25b
Earnings (TTM)-US$1.90b
Revenue (TTM)US$5.00b

6.8x

P/S Ratio

-18.0x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
SHOP income statement (TTM)
RevenueUS$5.00b
Cost of RevenueUS$2.41b
Gross ProfitUS$2.59b
Other ExpensesUS$4.50b
Earnings-US$1.90b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-1.50
Gross Margin51.87%
Net Profit Margin-38.01%
Debt/Equity Ratio10.5%

How did SHOP perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is SHOP undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for SHOP?

Other financial metrics that can be useful for relative valuation.

SHOP key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue5.7x
Enterprise Value/EBITDA-194.9x
PEG Ration/a

Price to Sales Ratio vs Peers

How does SHOP's PS Ratio compare to its peers?

SHOP PS Ratio vs Peers
The above table shows the PS ratio for SHOP vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPSEstimated GrowthMarket Cap
Peer Average3.9x
GDDY GoDaddy
2.8x8.7%US$11.1b
BIGC BigCommerce Holdings
4.2x16.7%US$1.1b
WIX Wix.com
3.3x13.3%US$4.5b
ETSY Etsy
5.3x14.0%US$12.7b
SHOP Shopify
6.8x20.6%US$34.2b

Price-To-Sales vs Peers: SHOP is expensive based on its Price-To-Sales Ratio (6.8x) compared to the peer average (3.9x).


Price to Earnings Ratio vs Industry

How does SHOP's PE Ratio compare vs other companies in the US IT Industry?

Price-To-Sales vs Industry: SHOP is expensive based on its Price-To-Sales Ratio (6.8x) compared to the US IT industry average (2.4x)


Price to Sales Ratio vs Fair Ratio

What is SHOP's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

SHOP PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio6.8x
Fair PS Ratio10.1x

Price-To-Sales vs Fair Ratio: SHOP is good value based on its Price-To-Sales Ratio (6.8x) compared to the estimated Fair Price-To-Sales Ratio (10.1x).


Share Price vs Fair Value

What is the Fair Price of SHOP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: SHOP ($26.94) is trading above our estimate of fair value ($12.87)

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


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.


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Future Growth

How is Shopify forecast to perform in the next 1 to 3 years based on estimates from 42 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


73.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SHOP is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: SHOP is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: SHOP is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: SHOP's revenue (20.6% per year) is forecast to grow faster than the US market (7.7% per year).

High Growth Revenue: SHOP's revenue (20.6% 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 (1%).


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Past Performance

How has Shopify performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


44.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SHOP is currently unprofitable.

Growing Profit Margin: SHOP is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: SHOP is unprofitable, but has reduced losses over the past 5 years at a rate of 44.7% per year.

Accelerating Growth: Unable to compare SHOP's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: SHOP is unprofitable, making it difficult to compare its past year earnings growth to the IT industry (19.2%).


Return on Equity

High ROE: SHOP has a negative Return on Equity (-21.81%), as it is currently unprofitable.


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Financial Health

How is Shopify's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: SHOP's short term assets ($7.9B) exceed its short term liabilities ($703.2M).

Long Term Liabilities: SHOP's short term assets ($7.9B) exceed its long term liabilities ($1.3B).


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 not well covered by operating cash flow (13.7%).

Interest Coverage: Insufficient data to determine if SHOP's interest payments on its debt are well covered by EBIT.


Balance Sheet


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Dividend

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

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Shopify Dividend Yield vs Market
How does Shopify dividend yield compare to the market?
SegmentDividend Yield
Company (Shopify)n/a
Market Bottom 25% (US)1.7%
Market Top 25% (US)4.7%
Industry Average (IT)1.6%
Analyst forecast in 3 Years (Shopify)0%

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.


Earnings Payout to Shareholders

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


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as SHOP has not reported any payouts.


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Management

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

1.4yrs

Average management tenure


CEO

Tobi Lütke (41 yo)

18.75yrs

Tenure

US$20,000,458

Compensation

Mr. Tobias Lütke, also known as Tobi, Co-founded Shopify Inc. in September 2004 and serves as its Chairman. He serves as Director at Coinbase, Inc. since 2022. Mr. Lütke has been the Chief Executive Office...


CEO Compensation Analysis

Tobi Lütke's Compensation vs Shopify Earnings
How has Tobi Lütke's remuneration changed compared to Shopify's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

-US$2b

Mar 31 2022n/an/a

US$182m

Dec 31 2021US$20mUS$1

US$3b

Sep 30 2021n/an/a

US$3b

Jun 30 2021n/an/a

US$2b

Mar 31 2021n/an/a

US$2b

Dec 31 2020US$15mUS$105k

US$320m

Sep 30 2020n/an/a

US$196m

Jun 30 2020n/an/a

-US$67m

Mar 31 2020n/an/a

-US$132m

Dec 31 2019US$11mUS$616k

-US$125m

Sep 30 2019n/an/a

-US$127m

Jun 30 2019n/an/a

-US$78m

Mar 31 2019n/an/a

-US$73m

Dec 31 2018US$9mUS$586k

-US$65m

Sep 30 2018n/an/a

-US$66m

Jun 30 2018n/an/a

-US$52m

Mar 31 2018n/an/a

-US$42m

Dec 31 2017US$8mUS$638k

-US$40m

Sep 30 2017n/an/a

-US$46m

Jun 30 2017n/an/a

-US$46m

Mar 31 2017n/an/a

-US$40m

Dec 31 2016US$447kUS$447k

-US$35m

Sep 30 2016n/an/a

-US$33m

Jun 30 2016n/an/a

-US$28m

Mar 31 2016n/an/a

-US$23m

Dec 31 2015US$311kUS$311k

-US$19m

Compensation vs Market: Tobi's total compensation ($USD20.00M) is above average for companies of similar size in the US market ($USD13.04M).

Compensation vs Earnings: Tobi's compensation has increased whilst the company is unprofitable.


Leadership Team

Experienced Management: SHOP's management team is not considered experienced ( 1.4 years average tenure), which suggests a new team.


Board Members

Experienced Board: SHOP's board of directors are considered experienced (7.8 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

NYSE:SHOP Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
10 May 22BuyUS$999,720Toby ShannanIndividual29,590US$33.79
10 May 22BuyUS$10,006,323Tobias LütkeIndividual296,170US$33.79
10 May 22BuyUS$49,811Amy ShaperoIndividual1,470US$33.88
10 May 22BuyUS$999,720Harley FinkelsteinIndividual29,590US$33.79
10 May 22BuyUS$49,765Jessica HertzIndividual1,470US$33.85
03 Mar 22SellUS$207,214Toby ShannanIndividual3,200US$65.38
03 Mar 22SellUS$461,052Amy ShaperoIndividual7,120US$65.38
03 Mar 22SellUS$427,380Harley FinkelsteinIndividual6,600US$65.38
26 Nov 21SellUS$836,361Harley FinkelsteinIndividual5,100US$163.99
17 Nov 21SellUS$329,938Colleen JohnstonIndividual2,000US$164.97
15 Nov 21SellUS$814,976Toby ShannanIndividual4,860US$167.69

Ownership Breakdown

What is the ownership structure of SHOP?
Owner TypeNumber of SharesOwnership Percentage
Private Companies00%
Individual Insiders80,747,3086.4%
General Public445,060,09435.0%
Institutions745,518,54158.6%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 45.16% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
6.24%
Tobias Lütke
79,267,191$2.1b0.38%no data
5.43%
Capital Research and Management Company
68,973,017$1.9b-1.83%0.13%
5.39%
Morgan Stanley Investment Management Inc.
68,524,354$1.8b13.86%1.45%
4.49%
Baillie Gifford & Co.
57,045,303$1.5b6.17%0.79%
2.95%
Klister Credit Corp.
37,500,000$1.0b-0.45%100%
2.93%
The Vanguard Group, Inc.
37,293,050$1.0b2.22%0.02%
2.44%
T. Rowe Price Group, Inc.
31,003,772$835.2m-11.54%0.1%
1.85%
Sands Capital Management, LLC
23,560,742$634.7m10.74%1.98%
1.24%
Loomis Sayles & Company, L.P.
15,731,416$423.8m27.05%0.79%
1.16%
WCM Investment Management, LLC
14,775,238$398.0m-18.41%0.94%
1.1%
Renaissance Technologies LLC
14,036,600$378.1m0%0.47%
0.99%
Franklin Resources, Inc.
12,634,139$340.4m16.35%0.15%
0.98%
Jarislowsky, Fraser Limited
12,517,695$337.2m9.21%2.02%
0.98%
Nikko Asset Management Co., Ltd.
12,428,329$334.8m15.54%0.15%
0.9%
Norges Bank Investment Management
11,458,760$308.7m0%0.04%
0.73%
SCGE Management, L.P.
9,320,000$251.1m0%7.71%
0.7%
RBC Global Asset Management Inc.
8,918,713$240.3m3.77%0.18%
0.7%
FMR LLC
8,892,261$239.6m-60.77%0.02%
0.63%
TD Asset Management, Inc.
7,997,620$215.5m-4.24%0.21%
0.63%
The Bank of Nova Scotia, Banking Investments
7,955,268$214.3m-12.48%0.56%
0.59%
Generation Investment Management LLP
7,502,765$202.1m801.95%1.07%
0.58%
BMO Asset Management Corp.
7,382,809$198.9m-29.43%0.12%
0.54%
SRS Investment Management, LLC
6,906,720$186.1m344.34%3.71%
0.5%
HMI Capital Management, L.P.
6,339,430$170.8m127.63%6.19%
0.49%
Legal & General Investment Management Limited
6,166,990$166.1m5.55%0.05%

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$34.250b
  • Shares outstanding: 1.27b
  • Website: https://www.shopify.com

Number of Employees


Location

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


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SHOPNYSE (New York Stock Exchange)YesClass A Subordinate Voting SharesUSUSDMay 2015
SHOPTSX (The Toronto Stock Exchange)YesClass A Subordinate Voting SharesCACADMay 2015
307DB (Deutsche Boerse AG)YesClass A Subordinate Voting SharesDEEURMay 2015
0VHALSE (London Stock Exchange)YesClass A Subordinate Voting SharesGBUSDMay 2015
SHOP NBMV (Bolsa Mexicana de Valores)YesClass A Subordinate Voting SharesMXMXNMay 2015
SHOPDBASE (Buenos Aires Stock Exchange)CEDEAR EACH 107 REPR 1 COMARUSDMar 2021
SHOPBASE (Buenos Aires Stock Exchange)CEDEAR EACH 107 REPR 1 COMARARSMar 2021
S2HO34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 120 REPR 1 COMBRBRLApr 2021

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/10/02 00:00
End of Day Share Price2022/09/30 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


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.