Shopify (NASDAQ:SHOP – Get Free Report) is one of 271 publicly-traded companies in the “IT Services” industry, but how does it compare to its competitors? We will compare Shopify to related businesses based on the strength of its profitability, analyst recommendations, earnings, risk, valuation, institutional ownership and dividends.
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 | 14.53% | 12.58% | 10.94% |
| Shopify Competitors | -191.23% | -32.13% | -8.65% |
Analyst Recommendations
This is a breakdown 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 | 1992 | 5654 | 9471 | 342 | 2.47 |
Shopify currently has a consensus target price of $178.82, indicating a potential upside of 20.09%. As a group, “IT Services” companies have a potential upside of 31.29%. Given Shopify’s competitors higher probable upside, analysts clearly believe Shopify has less favorable growth aspects than its competitors.
Volatility & Risk
Shopify has a beta of 2.65, meaning that its share price is 165% more volatile than the S&P 500. Comparatively, Shopify’s competitors have a beta of 2.15, meaning that their average share price is 115% more volatile than the S&P 500.
Earnings & Valuation
This table compares Shopify and its competitors top-line revenue, earnings per share and valuation.
| Gross Revenue | Net Income | Price/Earnings Ratio | |
| Shopify | $11.56 billion | $1.23 billion | 90.80 |
| Shopify Competitors | $3.24 billion | $227.67 million | -23.83 |
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.
Institutional and Insider Ownership
69.3% of Shopify shares are held by institutional investors. Comparatively, 36.7% of shares of all “IT Services” companies are held by institutional investors. 20.4% of shares of all “IT Services” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Summary
Shopify beats its competitors on 11 of the 13 factors compared.
Shopify Company Profile
Shopify Inc., a commerce company, provides a commerce platform and services in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, Australia, China, and Latin America. The company’s platform enables merchants to displays, manages, markets, and sells its products through various sales channels, including web and mobile storefronts, physical retail locations, pop-up shops, social media storefronts, native mobile apps, buy buttons, and marketplaces; and enables to manage products and inventory, process orders and payments, fulfill and ship orders, new buyers and build customer relationships, source products, leverage analytics and reporting, manage cash, payments and transactions, and access financing. It also sells custom themes and apps, and registration of domain names; and merchant solutions, which include accepting payments, shipping, and securing working capital. The company was formerly known as Jaded Pixel Technologies Inc. and changed its name to Shopify Inc. in November 2011. Shopify Inc. was incorporated in 2004 and is headquartered in Ottawa, Canada.
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