Is Shopify Stock a Good Investment?
Shopify Investment Advice | SHOP |
- Examine Shopify's financial health by looking at its balance sheet, income statement, and cash flow statement. Analyze key financial ratios, such as Price-to-Earnings (P/E), Price-to-Sales (P/S), and Price-to-Book (P/B), to determine whether the stock is fairly valued or over/undervalued.
- Research Shopify's leadership team and their track record. Good management can help Shopify navigate difficult times and make strategic decisions that benefit shareholders and increases its net worth.
- Consider the overall health of the Internet Services & Infrastructure space and any emerging trends that could impact Shopify's business and its evolving consumer preferences.
- Compare Shopify's performance and market position to its competitors. Analyze how Shopify is positioned in terms of product offerings, innovation, and market share.
- Check if Shopify pays a dividend and its dividend yield and payout ratio.
- Review what financial analysts are saying about Shopify's stock and their price targets. However, remember that analysts' opinions can vary, and their predictions may not always be accurate.
It's important to note that investing in Shopify stock, carries risks, and you should carefully consider your investment goals and risk tolerance before making any investment decisions. Also, remember that it's important for investors to have a long-term perspective and a well-diversified portfolio to manage the impact of stock market volatility on their investments. Below is a detailed guide on how to decide if Shopify is a good investment.
Sell | Buy |
Strong Buy
Market Performance | Good | Details | |
Volatility | Very steady | Details | |
Hype Condition | Under hyped | Details | |
Current Valuation | Overvalued | Details | |
Odds Of Distress | Very Small | Details | |
Economic Sensitivity | Almost mirrors the market | Details | |
Investor Sentiment | Impartial | Details | |
Analyst Consensus | Buy | Details | |
Financial Strenth (F Score) | Strong | Details | |
Financial Leverage | Not Rated | Details | |
Reporting Quality (M-Score) | Possible Manipulator | Details |
Examine Shopify Stock
Researching Shopify's stock involves analyzing various aspects of the company and its industry to make an informed investment decision. The key areas to focus on are fundamentals, business model and competitive advantage. It is also important to analyze trends in revenue, net income, and cash flow, as well as key financial ratios, such as price-to-earnings (P/E), price-to-sales (P/S), and debt-to-equity (D/E). About 71.0% of the company shares are owned by institutional investors. The company has Price/Earnings To Growth (PEG) ratio of 1.12. Shopify had not issued any dividends in recent years. The entity had 10:1 split on the 29th of June 2022.
To determine if Shopify is a good investment, evaluating the company's potential for future growth is also very important. This may include expanding into new markets, launching new products or services, or improving operational efficiency. Companies with strong growth prospects can be more attractive investments. This aspect of the research should be conducted in the context of the overall market and industry in which the company operates and should include an analysis of growth potential, competitive landscape, and any regulatory or economic factors that could impact the business. Some of the essential points regarding Shopify's research are outlined below:
| Shopify appears to be risky and price may revert if volatility continues | |
| Shopify is unlikely to experience financial distress in the next 2 years | |
| Shopify has a strong financial position based on the latest SEC filings | |
| About 71.0% of the company shares are owned by institutional investors | |
| Latest headline from finance.yahoo.com: Online Survey Software Market to Expand by USD 5.57 Billion , Driven by Demand for Real-Time Data Analysis, AI Redefining Market Landscape - Technavio |
Shopify uses earnings reports to provide investors with an update of all three financial statements, including the income statement, the balance sheet, and the cash flow statement. Therefore, it is also crucial when considering investing in Shopify. Every quarterly earnings report provides investors with an overview of sales, expenses, and net income for the most recent period. It also may provide a comparison to Shopify's previous reporting period. The quarterly earnings reports are usually disseminated to the public via Form 10-Q, which is a legal document filed with the Securities and Exchange Commission every quarter.
| 13th of February 2024 Upcoming Quarterly Report | View | |
| 2nd of May 2024 Next Financial Report | View | |
| 31st of December 2023 Next Fiscal Quarter End | View | |
| 13th of February 2024 Next Fiscal Year End | View | |
| 30th of September 2023 Last Quarter Report | View | |
| 31st of December 2022 Last Financial Announcement | View |
Earnings surprises can significantly impact Shopify's stock price both in the short term and over time. Negative earnings surprises usually result in a price decline. However, it has been seen that positive earnings surprises lead to an immediate rise in a stock's price and a gradual increase over time. This is why we often hear news about some companies beating earning projections. Financial analysts spend a large amount of time predicting earnings per share (EPS) along with other important future indicators. Many analysts use forecasting models, management guidance, and additional fundamental information to derive an EPS estimate. Below are the table of largest EPS Surprises Shopify's investors have experienced.
| Reported | Fiscal Date | Estimated EPS | Reported EPS | Surprise | |||
|---|---|---|---|---|---|---|---|
2019-10-29 | 2019-09-30 | 0.01 | 0.02 | 0.01 | 100 | ||
2019-02-12 | 2018-12-31 | 0.02 | 0.03 | 0.01 | 50 | ||
2016-11-02 | 2016-09-30 | -0.03 | -0.02 | 0.01 | 33 | ||
2020-02-12 | 2019-12-31 | 0.02 | 0.04 | 0.02 | 100 | ||
2019-08-01 | 2019-06-30 | 0.03 | 0.01 | -0.02 | 66 | ||
2015-11-04 | 2015-09-30 | -0.01 | -0.03 | -0.02 | 200 | ||
2015-07-30 | 2015-06-30 | -0.01 | -0.03 | -0.02 | 200 | ||
2024-05-08 | 2024-03-31 | 0.17 | 0.2 | 0.03 | 17 |
Know Shopify's Top Institutional Investors
Have you ever been surprised when a price of an equity instrument such as Shopify is soaring high without any particular reason? This is usually happening because many institutional investors are aggressively trading Shopify backward and forwards among themselves. Shopify's institutional investor refers to the entity that pools money to purchase Shopify's securities or originate loans. Institutional investors include commercial and private banks, credit unions, insurance companies, pension funds, hedge funds, endowments, and mutual funds. Operating companies that invest excess capital in these types of assets may also be included in the term and may influence corporate governance by exercising voting rights in their investments.
| Shares | Loomis, Sayles & Company Lp | 2024-06-30 | 15.5 M | Sands Capital Management, Llc | 2024-09-30 | 15.2 M | Norges Bank | 2024-06-30 | 14.2 M | Franklin Resources Inc | 2024-06-30 | 12.3 M | Bank Of Montreal | 2024-06-30 | 11.3 M | Bmo Capital Markets Corp. | 2024-06-30 | 11.3 M | Bank Of America Corp | 2024-06-30 | 10.6 M | Fidelity International Ltd | 2024-06-30 | 9.9 M | Td Asset Management Inc | 2024-09-30 | 9 M | Morgan Stanley - Brokerage Accounts | 2024-06-30 | 97.1 M | Baillie Gifford & Co Limited. | 2024-09-30 | 63.4 M |
Shopify's market capitalization trends
The company currently falls under 'Mega-Cap' category with a current market capitalization of 141.3 B.Market Cap |
|
Shopify's profitablity analysis
| Last Reported | Projected for Next Year | ||
| Return On Tangible Assets | 0.01 | 0.01 | |
| Return On Capital Employed | 0.02 | 0.03 | |
| Return On Assets | 0.01 | 0.01 | |
| Return On Equity | 0.01 | 0.02 |
Determining Shopify's profitability involves analyzing its financial statements and using various financial metrics to determine if Shopify is a good buy. For example, gross profit margin measures Shopify's profitability after accounting for the cost of goods sold, while net profit margin measures profitability after accounting for all expenses. Other important metrics include return on assets, return on equity, and free cash flow. By reviewing multiple sources and metrics, you can gain a complete picture of Shopify's profitability and make more informed investment decisions.
Evaluate Shopify's management efficiency
Shopify has return on total asset (ROA) of 0.0563 % which means that it generated a profit of $0.0563 on every $100 spent on assets. This is way below average. Similarly, it shows a return on stockholder's equity (ROE) of 0.1531 %, meaning that it created $0.1531 on every $100 dollars invested by stockholders. Shopify's management efficiency ratios could be used to measure how well Shopify manages its routine affairs as well as how well it operates its assets and liabilities. As of 11/24/2024, Return On Tangible Assets is likely to grow to 0.01. Also, Return On Capital Employed is likely to grow to 0.03. As of 11/24/2024, Total Current Liabilities is likely to grow to about 942.9 M. Also, Liabilities And Stockholders Equity is likely to grow to about 11.9 B| Last Reported | Projected for Next Year | ||
| Book Value Per Share | 7.07 | 7.43 | |
| Tangible Book Value Per Share | 6.72 | 7.05 | |
| Enterprise Value Over EBITDA | -12.4 K | -11.8 K | |
| Price Book Value Ratio | 11.01 | 15.57 | |
| Enterprise Value Multiple | -12.4 K | -11.8 K | |
| Price Fair Value | 11.01 | 15.57 | |
| Enterprise Value | 99.6 B | 51.9 B |
The management team at Shopify has a track record of steering the company towards sustained growth. Evaluating their strategies helps in understanding the stock's long-term potential.
Beta 2.365 |
Basic technical analysis of Shopify Stock
As of the 24th of November, Shopify has the Risk Adjusted Performance of 0.1461, semi deviation of 1.64, and Coefficient Of Variation of 554.01. In relation to fundamental indicators, the technical analysis model makes it possible for you to check existing technical drivers of Shopify, as well as the relationship between them.Shopify's insider trading activities
Some recent studies suggest that insider trading raises the cost of capital for securities issuers and decreases overall economic growth. Trading by specific Shopify insiders, such as employees or executives, is commonly permitted as long as it does not rely on Shopify's material information that is not in the public domain. Local jurisdictions usually require such trading to be reported in order to monitor insider transactions. In many U.S. states, trading conducted by corporate officers, key employees, directors, or significant shareholders must be reported to the regulator or publicly disclosed, usually within a few business days of the trade. In these cases Shopify insiders are required to file a Form 4 with the U.S. Securities and Exchange Commission (SEC) when buying or selling shares of their own companies.
Eisenberg Michael A over six months ago Discretionary transaction by Eisenberg Michael A of 3141670 shares of Shopify subject to Rule 16b-3 | ||
Eisenberg Michael A over six months ago Acquisition by Eisenberg Michael A of 75000 shares of Shopify subject to Rule 16b-3 |
Shopify's Outstanding Corporate Bonds
Shopify issues bonds to finance its operations. Corporate bonds make up one of the largest components of the U.S. bond market, which is considered the world's largest securities market. Shopify uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt. Most Shopify bonds can be classified according to their maturity, which is the date when Shopify has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
| Boeing Co 2196 Corp BondUS097023DG73 | View | |
| HSBC Holdings PLC Corp BondUS404280DR76 | View |
Understand Shopify's technical and predictive indicators
Using predictive indicators to make investment decisions involves analyzing Shopify's various financial and market-based factors to help forecast future trends and identify investment opportunities. Select the indicators that are most relevant to your investment strategy. Each indicator has its own strengths and weaknesses, so it's essential to combine multiple indicators to get a more comprehensive view of the market and reduce the risk of making poor decisions based on limited data.
| Risk Adjusted Performance | 0.1461 | |||
| Market Risk Adjusted Performance | 0.5164 | |||
| Mean Deviation | 1.97 | |||
| Semi Deviation | 1.64 | |||
| Downside Deviation | 2.03 | |||
| Coefficient Of Variation | 554.01 | |||
| Standard Deviation | 3.35 | |||
| Variance | 11.23 | |||
| Information Ratio | 0.1415 | |||
| Jensen Alpha | 0.453 | |||
| Total Risk Alpha | 0.0671 | |||
| Sortino Ratio | 0.2334 | |||
| Treynor Ratio | 0.5064 | |||
| Maximum Drawdown | 26.26 | |||
| Value At Risk | (2.68) | |||
| Potential Upside | 4.91 | |||
| Downside Variance | 4.13 | |||
| Semi Variance | 2.7 | |||
| Expected Short fall | (2.35) | |||
| Skewness | 3.53 | |||
| Kurtosis | 20.83 |
| Risk Adjusted Performance | 0.1461 | |||
| Market Risk Adjusted Performance | 0.5164 | |||
| Mean Deviation | 1.97 | |||
| Semi Deviation | 1.64 | |||
| Downside Deviation | 2.03 | |||
| Coefficient Of Variation | 554.01 | |||
| Standard Deviation | 3.35 | |||
| Variance | 11.23 | |||
| Information Ratio | 0.1415 | |||
| Jensen Alpha | 0.453 | |||
| Total Risk Alpha | 0.0671 | |||
| Sortino Ratio | 0.2334 | |||
| Treynor Ratio | 0.5064 | |||
| Maximum Drawdown | 26.26 | |||
| Value At Risk | (2.68) | |||
| Potential Upside | 4.91 | |||
| Downside Variance | 4.13 | |||
| Semi Variance | 2.7 | |||
| Expected Short fall | (2.35) | |||
| Skewness | 3.53 | |||
| Kurtosis | 20.83 |
Consider Shopify's intraday indicators
Shopify intraday indicators are useful technical analysis tools used by many experienced traders. Just like the conventional technical analysis, daily indicators help intraday investors to analyze the price movement with the timing of Shopify stock daily movement. By combining multiple daily indicators into a single trading strategy, you can limit your risk while still earning strong returns on your managed positions.
Shopify Corporate Filings
6K | 12th of November 2024 A report filed by foreign private issuers with SEC. A foreign private issuer is a non-U.S. company with securities traded on U.S. exchanges. | ViewVerify |
| 5th of November 2024 Other Reports | ViewVerify | |
F4 | 29th of October 2024 The report filed by a party regarding the acquisition or disposition of a company's common stock, as well as derivative securities such as options, warrants, and convertible securities | ViewVerify |
| 24th of May 2024 Other Reports | ViewVerify |
Shopify Stock media impact
Far too much social signal, news, headlines, and media speculation about Shopify that are available to investors today. That information is available publicly through Shopify media outlets and privately through word of mouth or via Shopify internal channels. However, regardless of the origin, that massive amount of Shopify data is challenging to quantify into actionable patterns, especially for investors that are not very sophisticated with ever-evolving tools and techniques used in the investment management field.
A primary focus of Shopify news analysis is to determine if its current price reflects all relevant headlines and social signals impacting the current market conditions. A news analyst typically looks at the history of Shopify relative headlines and hype rather than examining external drivers such as technical or fundamental data. It is believed that price action tends to repeat itself due to investors' collective, patterned thinking related to Shopify's headlines and news coverage data. This data is often completely overlooked or insufficiently analyzed for actionable insights to drive Shopify alpha.
Shopify Sentiment by Major News Outlets
Investor sentiment, mood or attitude towards Shopify can have a significant impact on its stock price or the market as a whole. This sentiment can be positive or negative, and various factors, such as economic indicators, news events, or market trends, can influence it. When investor sentiment is positive, investors are more likely to buy stocks, increasing demand and increasing the stock price. Positive investor sentiment can be driven by good news about the company or the broader market, such as solid earnings reports or positive economic data.
Note that negative investor sentiment can cause investors to sell stocks, leading to a decrease in demand and a drop in the stock price. Negative sentiment can be driven by factors such as poor earnings reports, negative news about the company or industry, or broader economic concerns. It's important to note that investor sentiment is just one of many factors that can affect stock prices. Other factors, such as company performance, industry trends, and global economic conditions, can also play a significant role in determining the value of a stock.
Shopify Historical Investor Sentiment
Investor biases related to Shopify's public news can be used to forecast risks associated with an investment in Shopify. The trend in average sentiment can be used to explain how an investor holding Shopify can time the market purely based on public headlines and social activities around Shopify. Please note that most equities that are difficult to arbitrage are affected by market sentiment the most.
Shopify's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Shopify and other traded tickers. The bigger the bubble, the more accurate the estimated score. Higher bars for a given day show more participation in the average Shopify news discussions. The higher the estimate score, the more favorable the investor's outlook on Shopify.
Shopify Corporate Directors
| Carrie Gillard | Director Relations | Profile | |
| Thomas Epting | Director Network | Profile | |
| Robert Ashe | Lead Independent Director | Profile | |
| Colleen Johnston | Independent Director | Profile |
Additional Tools for Shopify Stock Analysis
When running Shopify's price analysis, check to measure Shopify's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Shopify is operating at the current time. Most of Shopify's value examination focuses on studying past and present price action to predict the probability of Shopify's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Shopify's price. Additionally, you may evaluate how the addition of Shopify to your portfolios can decrease your overall portfolio volatility.