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

Institutional & Insider Ownership

53.8% of Shopify shares are held by institutional investors. Comparatively, 47.7% of shares of all “E-commerce & Auction Services” companies are held by institutional investors. 17.9% of shares of all “E-commerce & Auction Services” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Shopify and its peers’ 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 -1,538.29% -32.31% -7.94%

Valuation & Earnings

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

Gross Revenue EBITDA Price/Earnings Ratio
Shopify $509.00 million -$34.47 million -235.82
Shopify Competitors $2.65 billion $890.79 million -31.42

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Shopify and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shopify 1 16 20 0 2.51
Shopify Competitors 114 733 1566 87 2.65

Shopify presently has a consensus price target of $93.76, indicating a potential downside of 22.04%. As a group, “E-commerce & Auction Services” companies have a potential upside of 7.32%. Given Shopify’s peers stronger consensus rating and higher probable upside, analysts plainly believe Shopify has less favorable growth aspects than its peers.

Volatility and Risk

Shopify has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500. Comparatively, Shopify’s peers have a beta of 1.53, meaning that their average stock price is 53% more volatile than the S&P 500.

Summary

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

Shopify Company Profile

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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