Skip to Content

Shopify Inc Registered Shs -A- Subord Vtg SHOP

Morningstar Rating
$76.94 +1.40 (1.85%)
View Full Chart
Unlock our analysis with Morningstar Investor

Company Report

Shopify Earnings: Strength Abounds but Expense Growth Guidance Is Concerning

Narrow-moat Shopify reported strong fourth-quarter results, including better-than-expected revenue and meaningfully better profitability relative to our model. Guidance was also a little better than anticipated on the top and bottom lines. We have been expecting meaningful increases in profitability and Shopify has delivered. However, we think our profitability estimates skew below broader investor expectations on our more cautious views on the financial health of consumers, gross margin expansion, and results that have been volatile. We think the negative stock reaction is a function of elevated expectations around margins, as management guided operating expenses to increase in the low-teen percentage area sequentially despite a normal seasonal decline in revenue. Still, the outlook was better than we anticipated, so we continued to refine our near and medium-term profitability assumptions upward, which led us to raise our fair value estimate to $68/CAD 91 per share from $60/CAD 83. After the strong run the shares had throughout 2023, we now see shares as overvalued.

Price vs Fair Value

SHOP is trading at a 11% premium.
Price
$75.56
Fair Value
$26.00
Uncertainty
Very High
1-Star Price
$183.00
5-Star Price
$55.00
Economic Moat
Nydlsm
Capital Allocation
Bmqnygvx

Bulls Say, Bears Say

Bulls

Shopify’s growth has been strong and is expected to remain so, with robust new merchant adds, increasing GMV, and high attach rates.

Bears

Shopify has traded at lofty valuations at times, and while it might continue to generate strong growth, the company may still fail to live up to optimistic assumptions embedded in the share price.

Is it the right time to buy, sell, or hold?
Start a free trial of Morningstar Investor to unlock exclusive ratings and continuous analyst coverage to help you decide if SHOP is a good fit for your portfolio.

News

Trading Information

Previous Close Price
$75.54
Day Range
$75.9777.13
52-Week Range
$39.0491.55
Bid/Ask
$76.90 / $76.96
Market Cap
$99.23 Bil
Volume/Avg
638,851 / 11.1 Mil

Key Statistics

Price/Earnings (Normalized)
103.51
Price/Sales
13.87
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Shopify offers an e-commerce platform primarily to small and medium-size businesses. The firm has two segments. The subscription solutions segment allows Shopify merchants to conduct e-commerce on a variety of platforms, including the company’s website, physical stores, pop-up stores, kiosks, social networks (Facebook), and Amazon. The merchant solutions segment offers add-on products for the platform that facilitate e-commerce and include Shopify Payments, Shopify Shipping, and Shopify Capital.
Sector
Technology
Industry
Software - Application
Stock Style Box
Large Growth
Total Number of Employees
11,600

Competitors

Valuation

Metric
SHOP
CRM
AMZN
Price/Earnings (Normalized)
103.5138.1860.96
Price/Book Value
10.725.008.91
Price/Sales
13.878.703.16
Price/Cash Flow
130.6924.6518.83
Price/Earnings
SHOP
CRM
AMZN

Financial Strength

Metric
SHOP
CRM
AMZN
Quick Ratio
6.860.860.70
Current Ratio
6.991.040.98
Interest Coverage
−13.0013.097.45
Quick Ratio
SHOP
CRM
AMZN

Profitability

Metric
SHOP
CRM
AMZN
Return on Assets (Normalized)
8.90%8.01%9.11%
Return on Equity (Normalized)
11.41%12.86%26.76%
Return on Invested Capital (Normalized)
8.15%10.76%14.52%
Return on Assets
SHOP
CRM
AMZN
See how this stock stacks up to its competitors with Morningstar Investor

Software - Application Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
CRM
Salesforce IncNttz$290.2 Bil
SAP
SAP SE ADRWflxbwn$218.3 Bil
INTU
Intuit IncRbt$184.6 Bil
UBER
Uber Technologies IncYcbtc$161.4 Bil
NOW
ServiceNow IncWxn$155.8 Bil
CDNS
Cadence Design Systems IncKwwmck$81.8 Bil
WDAY
Workday Inc Class AHrd$77.6 Bil
SNOW
Snowflake Inc Ordinary Shares - Class ANqzg$75.6 Bil
DASTY
Dassault Systemes SE ADRMsk$61.5 Bil

Sponsor Center