Financial Comparison: Shopify (SHOP) and Its Peers

Shopify (NYSE: SHOP) is one of 29 public companies in the “E-commerce & Auction Services” industry, but how does it weigh in compared to its competitors? We will compare Shopify to related companies based on the strength of its dividends, valuation, institutional ownership, risk, earnings, profitability and analyst recommendations.

Valuation & Earnings

This table compares Shopify and its competitors top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Shopify $509.00 million -$34.47 million -190.16
Shopify Competitors $5.30 billion $868.94 million -28.61

Shopify’s competitors have higher revenue and earnings than Shopify. Shopify is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Insider and Institutional Ownership

53.8% of Shopify shares are held by institutional investors. Comparatively, 49.7% of shares of all “E-commerce & Auction Services” companies are held by institutional investors. 17.1% of shares of all “E-commerce & Auction Services” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations for Shopify and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shopify 1 16 19 0 2.50
Shopify Competitors 87 683 1576 85 2.68

Shopify presently has a consensus target price of $94.47, suggesting a potential downside of 2.59%. As a group, “E-commerce & Auction Services” companies have a potential upside of 17.77%. Given Shopify’s competitors stronger consensus rating and higher probable upside, analysts clearly believe Shopify has less favorable growth aspects than its competitors.

Profitability

This table compares Shopify and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shopify -8.96% -8.26% -7.14%
Shopify Competitors -1,537.86% -31.01% -7.17%

Risk & Volatility

Shopify has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, Shopify’s competitors have a beta of 1.54, suggesting that their average share price is 54% more volatile than the S&P 500.

Summary

Shopify competitors beat Shopify on 8 of the 12 factors compared.

About Shopify

Shopify Inc. (Shopify) provides a cloud-based, multi-channel commerce platform designed for small and medium-sized businesses. The Company offers subscription solutions and merchant solutions. The Company’s software is used by merchants to run their business across all of their sales channels, including Web and mobile storefronts, physical retail locations, social media storefronts and marketplaces. The Shopify platform provides merchants with a single view of their business and customers across all of their sales channels and enables them to manage products and inventory, process orders and payments, ship orders, build customer relationships and leverage analytics and reporting all from one integrated back office. The Shopify platform includes a mobile-optimized checkout system, which is designed to enable merchants’ consumers to buy products over mobile Websites. Its merchants are able to offer their customers the ability to check out by using Apple Pay.

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