Shopify (SHOP) and Its Competitors Critical Comparison

Shopify (NASDAQ:SHOP) is one of 273 public companies in the “IT 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 earnings, profitability, institutional ownership, analyst recommendations, valuation, risk and dividends.

Volatility and Risk

Shopify has a beta of 2.65, indicating that its stock price is 165% more volatile than the S&P 500. Comparatively, Shopify’s competitors have a beta of 2.16, indicating that their average stock price is 116% more volatile than the S&P 500.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shopify	0	10	38	1	2.82
Shopify Competitors	2009	5677	9501	343	2.47

Shopify presently has a consensus price target of $178.82, suggesting a potential upside of 19.80%. As a group, “IT Services” companies have a potential upside of 24.09%. Given Shopify’s competitors higher probable upside, analysts plainly believe Shopify has less favorable growth aspects than its competitors.

Institutional & Insider Ownership

69.3% of Shopify shares are owned by institutional investors. Comparatively, 36.4% of shares of all “IT Services” companies are owned by institutional investors. 20.4% of shares of all “IT Services” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Shopify and its competitors revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Shopify	$11.56 billion	$1.23 billion	91.01
Shopify Competitors	$3.28 billion	$223.00 million	-30.74

Shopify has higher revenue and earnings than its competitors. Shopify is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

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	15.01%	14.03%	12.34%
Shopify Competitors	-190.54%	-32.69%	-8.39%

Summary

Shopify beats its competitors on 11 of the 13 factors compared.

About Shopify

Shopify is a commerce technology company that provides tools for businesses to create and operate online stores. Its platform supports activities such as product management, order processing, payments, shipping, marketing and customer engagement. Shopify also offers point-of-sale tools for merchants selling in person, connecting retail operations with online sales. Its services are used by businesses of varying sizes and are available to merchants in countries around the world. Founded in 2006, Shopify is headquartered in Ottawa, Canada.