Shopify Inc. (NASDAQ: SHOP)

Sector: Technology Industry: Software - Application CIK: 0001594805
Market Cap 147.12 Bn
P/B 10.92
P/E 119.52
P/S 12.73
ROIC (Qtr) 8.96
Div Yield % 0.00
Rev 1y % (Qtr) 30.58
Total Debt (Qtr) 188.00 Mn
Debt/Equity (Qtr) 0.01
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About

Investment thesis

Bull case

  • Strong operating cash flow of 2.03B provides robust 10.81x coverage of total debt 188M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 1.54B provide 90.88x coverage of short-term debt 17M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 14.67B provides 78.02x coverage of total debt 188M, indicating robust asset backing and low credit risk.
  • Tangible assets of 14.67B provide exceptional 36.85x coverage of deferred revenue 398M, showing strong service capability backing.
  • Robust free cash flow of 2.01B exceeds capital expenditure of 26M by 77.19x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 2.03B barely covers its investment activities of (1.19B), with a coverage ratio of -1.71, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (1.19B) provide weak support for R&D spending of 1.54B, which is -0.77x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 1.54B provide limited coverage of acquisition spending of (56M), which is -27.59x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Short-term investments of 6.02B significantly exceed cash reserves of 1.54B, which is 3.89x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • The company's operating cash flow of 2.03B shows concerning coverage of stock compensation expenses of 449M, with a 4.53 ratio indicating potential earnings quality issues.

Concentration Risk Benchmark Breakdown of Revenue (2025)

Concentration Risk Benchmark Breakdown of Revenue (2025)

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 235.43 Bn 27.31 5.44 9.50 Bn
2 SHOP Shopify Inc. 147.12 Bn 119.52 12.73 0.19 Bn
3 UBER Uber Technologies, Inc 147.10 Bn 14.63 2.83 12.08 Bn
4 CRM Salesforce, Inc. 122.20 Bn 594.48 15.45 11.14 Bn
5 INTU Intuit Inc. 113.93 Bn 178.01 32.63 6.78 Bn
6 ADBE Adobe Inc. 111.00 Bn 15.57 4.67 6.65 Bn
7 NOW ServiceNow, Inc. 109.54 Bn 62.67 8.25 2.40 Bn
8 ADP Automatic Data Processing Inc 86.44 Bn 20.41 4.07 4.37 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 9.60 2.08
EV to Cash from Ops. EV/CFO 71.73 11.38
EV to Debt EV to Debt 775.66 47.67
EV to EBIT EV/EBIT 96.64 6.78
EV to EBITDA EV/EBITDA 97.28 7.15
EV to Free Cash Flow [EV/FCF] EV/FCF 72.66 14.44
EV to Market Cap EV to Market Cap 0.99 -8.88
EV to Revenue EV/Rev 12.62 4.04
Price to Book Value [P/B] P/B 10.92 3.65
Price to Earnings [P/E] P/E 119.52 -117.75
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -4.05
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.38
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.48
Interest Coverage Int. cover (Qtr) 0.00 -43.57
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -36.84 -222.46
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 3.14 281.53
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.78
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -39.03 -327.55
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 34.92 30.09
EBIT Growth (1y) % EBIT 1y % (Qtr) -32.27 -213.00
EBT Growth (1y) % EBT 1y % (Qtr) -32.27 -86.84
EPS Growth (1y) % EPS 1y % (Qtr) -39.49 108.58
FCF Growth (1y) % FCF 1y % (Qtr) 25.67 6.29
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 24.22 94.58
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.76 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 1.11 3.78
Current Ratio Curr Ratio (Qtr) 5.96 8.27
Debt to Equity Ratio Debt/Equity (Qtr) 0.01 0.14
Interest Cover Ratio Int Coverage (Qtr) 0.00 -43.57
Times Interest Earned Times Interest Earned (Qtr) 0.00 -43.57
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 13.30 -105.03
EBIT Margin % EBIT Margin % (Qtr) 13.06 -130.16
EBT Margin % EBT Margin % (Qtr) 13.06 -121.17
Gross Margin % Gross Margin % (Qtr) 48.10 58.37
Net Profit Margin % Net Margin % (Qtr) 10.70 -126.13