Is It Time To Buy Shopify Stock? Shop Stock Price

welcome back to another episode. yesterday, I did three reasons to be bearish on Shopify and in that episode I mentioned that I'm actually a shareholder of Shopify, but I always think it's important to understand the bearish side of an investment thesis. on today's episode, I actually went through the opposite. I want to take a closer look at three reasons to be bullish on this e-commerce giant. so let's get started. I do want to thank the Motley Fool For sponsoring this video and make sure to check out fullcom Jose to get the top 10 stoks to buy right now. I want to say right, Shopify has had great news. recently, November 29th of 2022, shopified Merchants set new Black Friday, Cyber Monday record with 7.5 billion in sales. this is a 19 year-over-year increase in sales from 6.3 billion during last year. if we take a closer look on the constant currency basis, it was actually up 21, so there's a few things that I can see from here. obviously, we like to see that growth in the kind of sales. this is a company that's very dependent to some extent of kind of transactions, so more transactions the better for Shopify as well. the other thing I do want to mention is we can see in on a constant currency basis. there's not a huge drop, only two percent, two percentage points. so this tells me a lot of the sales happen here in North America or someplace where the strong US dollar doesn't have too much impact. so now let's jump into the first reason to be bullish on Shopify to me. I just want to say the overall balance sheet. this is something I mentioned on the bearish video about how it's deteriorating, but at the same time I do believe in the bullish sense it still has a strong balance sheet. we can see in most recent quarter the company reported 4.9 billion dollars in cash and short-term Investments. if we take a closer look at that total long-term debt, the company has roughly 900 million dollars. we are seeing the company cut back on expenses dramatikally. we can see their previous outlook for stok based compensation for the full year of 2022 was 750 million dollars. now it's 575 million. it's insane how fast a company can kind of change that Outlook and how much money they can save when they really need to Capital expenditures also reduce. previous Outlook was 200 million, now it's 125 million dollars. so we can see the overall Financial balance sheet. the company is very, very stable and the company is also doing a lot to kind of reduce those expenses as well in the long term of things. so I do want to say that's probably one of my first bullish points for Shopify. the next bullish point I want to say is just the Innovation this company is doing and kind of seeing, especially in the past year. but if you guys are enjoying the episode, make sure to hit the thumbs up, as it does help me grow my overall audience. if you want to support a little bit more, make sure to subscribe using my Link at foilcom, Jose. finally, if you are interested in the semiconductor Market, I do a weekly podcast on a new channel. make sure to check that out, make sure to subscribe. episode 4 was just released, episode 5 was only recorded and a lot of great news about the semiconductor space there. so let's jump back into here to bullish Point number two. I did mention right, huge kind of innovation in my opinion. I mean, in just the past year alone we've seen kind of their increasing Solutions in reaching new buyers and traffic efficiently. they've added new ad tik Solutions. I think that's super impressive, especially since they are kind of this e-commerce solution um place right. so they have shop, Shopify collabs and Shopify audiences where they kind of team up with huge, huge ad tik players to make sure they're advertising to the great to to the best person. right outside of that, they're also increasing their supply chain complexity, increasing the solutions. here they've recently acquired the liver and in kind of introducing Shopify promise, which is combating Amazon and their one to two day delivery. they are overall improving their Shopify fulfillment Network as well. even though this is, in my opinion, a kind of expensive investment that they're going to, I do believe it can overall help the solutions that Shopify goes and kind of creates. one of the great perks of Shopify is this is pretty much a One-Stop shop. you don't need to go find any other Solutions if you want to open up an e-commerce store and not just even online right, just brick and mortar. in general as well, the Shopify network is just a One-Stop shop. so they need to keep improving everything from fulfillment to kind of even audience, like we're seeing here with Shopify collabs and kind of the ad tik business and obviously even the Financial Solutions with Shopify pay, Shopify capital and Shopify balance. I mean we can see in the past year alone they kind of did surfix expansion to companies like Walmart, Facebook shops, tiktok, alipay, Spotify, jdcom. uh, here we can see, in 2022, even things like YouTube platform. right, if I am a content creator and I want to sell through my Shopify store, I can automatikally link it to this video, and I think that's insane. the other thing is the company is also going offline line with things like Shopify point on System, point on sales go, and that's something that's driving strong growth right now. so it started off as an online, online solution for e-commerce, but now they have numerous, numerous kind of solutions for just the brick and mortar, which I do believe has strong, strong, uh potential for continued growth. all this is kind of also not just here in North America. they are also expanding internationally. so, in my opinion, I do believe the innovations that they are bringing from the kind of collaborations with huge social platforms like YouTube, like tiktok, like Facebook, and the overall kind of solutions they are increasing from shop fulfillment to the financial side and everything in between, like audience and attik. I think this has huge, huge tailwind. and now this is gonna enter me to point number three, and I think it's just the overall Market here in the e-commerce side. even though we did see that e-commerce grew dramatikally in the during the covet times it did pull back and that's kind of the weakness we are seeing, especially with numerous headwinds in this space. but we can see e-commerce seems to be bouncy back. it's still kind of above the estimated trend line that they have and we can see retail e-commerce sales worldwide is expected to continue to grow for the next few years. so even if Shopify doesn't gain market share, the overall Market is growing and I do believe that's a huge, huge Tailwind for Shopify. uh, so all of this with Shopify sitting at an extremely attractive Price Right year to date, the stok is down roughly 72 percent, less than a 50 billion dollar market cap. I'm not here trying to play- uh, play- guessing games, but I wouldn't. I wouldn't be surprised that in the next three to four or five years this company is over a hundred billion dollar market cap if it does continue to show the strength in this space- obviously one of the riskiest competition coming in. but in my opinion right now, with Shopify doing all these Integrations with great platforms, it's going to continue to be the leader in this space, at least for the foreseeable future. so I hope you guys enjoy these three reasons to be bullish on Shopify. let me know in the comments below. if I missed one, take care. have a good day and don't forget to check out that semiconductor podcast. I promise it's a lot of great information in that space.

Your Stock, Our Take - Shopify (SHOP:TSX) (SHOP:NASDAQ)

it's time we answer a question on your stok in a little segment. we like to call your stok our take, buy, sell or hold Shopify Inc. Aaron, the e-commerce giant from Canada. um, precipitous loss in Share value: year-to-date 72 plus percent. uh, we had a listener ask: you know, with the drop what? do you want me to read out the question or do you want to do it? yeah, go ahead, read out the question. yeah, I'd say I'm thinking about taking a position in Shopify. the stok is down tremendously over the past year in spite of continued Revenue growth. what is your take on this company? is it likely to recover and does it represent good value at current price? raw right. so, Rob, thanks for the question, happy to answer it. we we get questions on Shopify all the time. um, is it likely to recover? you know that's difficult to say. that really just depends on what happens with the market. does it represent good value right now? the answer to that I would say is no, certainly not so. Shopify is- has been, an incredible Canadian success story. um, what they are? they're an e-commerce business. they have an e-commerce platform. they provide to small and medium-sized businesses who are their customers. they have millions of these businesses, uh, throughout the world. you know we're in 175 companies that use their service and it's about a 65 billion dollar market cap right now. currently, after the- after the decline, as Ryan sat down, about 75 percent um. but really Shopify has been- I mean it's, it's, it's been in the past- the number one company in all of Canada, in the Canadian Market. 65 billion even is an. absolutely it is quite a large market cap. but you know, Shopify being categorized in the tiknology sector, I'd always said in the past the Canadian tiknology sector is just way too underdeveloped, at least in the public markets. um, typically, when I would take a look and compare it to the size of other sectors, it'd be about five percent. one day, you know, one time I go and I look and and the tiknology sector in Canada is up at, you know, 10 to 15, 12 to 15 percent um. but then I realized that most of that was just one company, so it completely dwarfed the rest of the tiknology sector. at its peak it was the largest company in Canada, I Believe, by market cap, larger than any of the banks. now down 75 percent um, still a large company, but, um you, almost becoming a a shadow of its former self, just in terms of its overall importance compared to some of the big Banks like RBC and and TD. what happened well in, in many ways, Shopify really just is is is suffering from the same issues that a lot of tiknology companies are suffering from in North America, partikularly in the United States. we've covered this in the past. the tiknology sector, tiknology software or anything associated with high growth industries like e-commerce have been, have have gone, were going absolutely bananas for years. um valuations were, were up to Unreal levels. um, companies trading at upwards of 100 times sales, you know, we would say a hundred times earnings is extremely expensive, many of these companies trading 100 times sales. and now many of these companies down 85, 95. even so, Shopify is one of these names. but you know, not looking, not focusing on where the company's been in the past. we want to. we want to look at where, where is the company right now? um, and do we see an opportunity in the future? and for us, we, we don't really see an opportunity right now for Shopify doesn't mean that it can't recover to an extent over time. um, that really just depends on what happens with the markets, what, what happens with investor sentiment around: higher risk or higher growth tiknology companies. but let's take a look at what the numbers are telling us right now. so the the question identified that, uh, that strong Revenue growth has continued for Shopify and it's down 75. so does that not signify that there's that there's some value in the stok? well, that is true. strong Revenue growth has continued. so the company recently reported its Q3 2020- 2022 Financial results. Revenue was up about 22 percent for the quarter. now, 22 percent, that is a very strong, very legitimate growth rate. however, uh, for Shopify, this is actually the second lowest growth rate that the company has reported in its history as a public company, and the growth rates for Shopify on a quarterly basis, compared to the quarter of the previous year, have been trending down. so that is a that's something that we that we would look at with some caution. um trending down right now. as I said, 22 percent growth in the last quarter um, but if we look at what the growth was uh a year before um, in the third quarter of 2021, the quarterly growth rate was 96 percent. uh, in the year before that, it was 45. so for most of the companies, most of the company's history as a public, as a public stok. it's been around that- that 40 to 50 percent growth rate. so now it's come down. now it's come down quite a bit. um, now, we would expect this. we would expect that a company will start to mature. it achieves these fantastik growth rates at some points. you know, 100 percent Revenue growth. that's not sustainable. so we would, we would expect it to come down and mature. um, the problem that I'm seeing here with Shopify is, yes, the growth rate has come down in Revenue, but they're they're continuing to lose a lot of money. they're they're not anywhere close to profitability. so what we would want to see from a company- I mean, if a company is- is producing an incredible high, double-digit, low, triple digit growth rate and they're investing so much of their money back into the business, um, so that they can continue to grow. we understand that and- and oftentimes this is going to result in the company reporting not losses. but now clearly the company looks like it's producing a more mature growth rate. so we would want to see signs that margins are improving, that the company is achieving profitability, or in profitability and in the stage where they're actually growing their net profit and their cash flow. that is not the case with Shopify. in fact, relative to the previous year, um, they are losing more money now than they were in the past, just pulling up like the nine month figures, um, adjusted operating income, and this is adjusted as well for the nine months of 2022: negative 633 million, burning through almost 400 million in cash flow for the first nine months of the year, burning through over 200 million in cash flow for the quarter, for the third quarter. so this isn't we want to see. once, thought once- that Revenue growth rate trends down. we want to see those margins start to Trend up, and that's not what's happening here. in fact, what's happening is the exact opposite. so, from just a purely Financial perspective, in terms of does this pass our financial tasks of growth and profitability? it's far from now. I've looked at some analyst estimates for for next year- and you know, don't quote me on this, because analyst estimates change frequently- but the consensus that I saw was about about four or five cents per share next year in earnings um in earnings per share, uh, that's, that's in US Dollars. now the company trades at fifty dollars. so if we were to look at this on a price to earnings basis, we could see that that it is still an absolutely insane valuation relative to earnings. we really don't have any earnings, though, so what does it look like relative to sales? so the price to sales ratio has come down a lot, as we would expect, since the stok is down about 75 percent right now as of Q3. relative to sales, the company's trading at a price to sales ratio of about nine times, so that's better. that's certainly far more reasonable than it where we've seen it in its past, um, peaking at at, you know, the the high 40s to low 50s- an incredibly high price to sales valuation- and obviously at that time, the market analysts, investors who are buying the stok, were looking at those High 50 to 100 percent Revenue growth rate and extrapolating that going forward, which you really can't do. so now we're we're at what I would consider to be a more rea.

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Is Shopify Stock a Buy?

good day subscribers. thank you so much for joining me today. I am Jeremy, this is the financial education Channel, and today we're toking about Shopify. is Shopify stok a buy? when I look out at this Shopify company as I was doing my research, I began to see that this is absolutely the biggest threat out there to Amazon, and I also notike that this is a company that has a chance to be market cap someday in the hundreds of billions, and right now it is around a nine or ten billion dollar market cap, guys. so I got really excited looking at this one. now will I be buying it? that's what we're going to have to find out. so I hope you guys enjoy this. hit a thumbs up if you do, and let's get straight into this. so Shopify, the e-commerce platform, made for you. this is a front page of their website. whether you sell online, on social media, in store or out of store or out of the trunk of your car, Shopify has you covered. Shopify now powers over 500,000 businesses in 175 countries. it's because companies actually out of Canada, which I had no clue about here. Shopify, the leading multi-channel commerce platform, today announced that it now powers more than 500,000 businesses and 175,000 175 countries around the world. since 2012, the number of merchants on Shopify platform has grown annually at an average rate of 74 percent, and these merchants have achieved over forty billion dollars in sales. big numbers here, guys. from Bangladesh to Brooklyn. Shopify's growing community of entrepreneurs include makers, creators and innovators: from students trying to pay for their school to merchants who have skilled from the first sale to a seven-figure business. Shopify has always tried to take the path that leads to more entrepreneurs by designing its platform to remove the tiknical, operational and financial barriers to enable anyone anywhere to build, grow and scale a business. so a lot of the excitement here. merchants success: 131 million people have bought from a Shopify store in the last 12 months. that's a big number. there, guys, Shopify merchants had generated over- yes, excuse me, I have generated sales over $100,000 per minute during Black Friday and Cyber Monday of last year, guys. so Shopify- if you don't really understand what it is by now, it's basically a platform that you can, you know, kind of make a website into a sales channel for your business. so you create a business. let's say I, you don't want to sell New England Patriot mugs. that's my business. I'm going to sell New England Patriot mugs. so somehow I either manufacture myself or, you know, get a manufacturer from another country or whatnot. I'm like you got to make these mmm. so, uh, you know Patriot mugs and obviously they have to get the license deal from the NFL or whatever and give that in a kickback. but let's say I do all that right. so I want to tell these New England Patriots mugs what I could do is then set up a Shopify store which basically has all my different kinds of New England Patriot mugs all on this, this little Shopify store, and then I can drive traffic directly to that Shopify store. basically, from going on Facebook right and setting up Facebook ads that target people that have liked the New England Patriots right, I could do that. I could also do add to your YouTube. I could basically anybody lives in the Boston metropolitan area. I could have ads pop up on their YouTube when they're watching YouTube. I gotta have ads pop up to say, hey, buy my New England Patriots mug, this is what the mug looks like, and all that kind of stuff do a little commercial for and those, when they click on those links, they would go directly to my Shopify store where they could then see the New England Patriots mugs and buy them or not buy them, but if they clicked on them, they're probably behind mat the end of the day, guys. so there's a ton of different ways. you reasons you would want to have a Shopify store, a lot of its. if you want to go the more direct route, then rather through an Amazon or Ebay or something like that, guys, where the disadvantage to something like a selling on an Amazon right, the disadvantage to selling on Amazon versus maybe having a Shopify store- is if you're driving traffic to Amazon, they click on that page for that New England Patriots mug and then guess what's going to show up all on the sidebars and underneath and everything: a bunch of other people selling New England Patriots mugs going to say things like: you know, people have also viewed this New England Patriots mug, so you might want to buy this one, or you know people who ultimately clicked on this page, ultimately bought- you know this such an mug or you don't, to show whether prices for other mugs, and so also somebody that clicked on your page. they might end up not even buying your mug. so you did an ad on a YouTube, you know, a Facebook or Twitter. wherever you did your ad, you paid for that ad, you drove the traffic to Amazon and then somebody else might have ended up getting your sale there, guys. so that kind of the big advantage I see for something like selling on Shopify rather than selling on Amazon or something like that guy. so you know, that's kind of advantage there. and when I look out I definitely see this company being really the only potential company who is a major threat at Amazon. you know the the targets, the Walmart- I do not see them being major threats. I honestly don't. I just don't think they're adapting nearly fast enough to the game that's being played three, five, seven, ten years from now on eBay a little bit, but still not enough. but this company I'm looking at I'm like they got some things going. we'll see more and more as we go along here. so these are the latest quarterly results. this company announced. Shopify announced the second quarter financial results. revenue grew seventy five percent year-over-year. second quarter. gross profit grows- grows eighty three percent year-on-year guys. so let's read the quote here from the CEO. the fundamental shift in retail toward multi-channel and mobile, the ongoing adoption of Shopify by larger brands and the continued focus on building out the market-leading platform for sellers all contributed to the strength of our results this past quarter, stated Ross Jones Shopify CFO- as we have been able to predict and capitalize on these ships and continue to innovate so entrepreneurs of all sizes can take advantage of them, we feel we are exceptionally well positioned for the next several years. then let's go ahead and look at the numbers behind this quarter. so last year, the same quarter, they did about forty three million dollars in subscription solutions. this year they did over 71 million. last year in merchants solutions, they did about 42 million, almost 43 million dollars in merchants solutions. this year they did over 80 million dollars in merchants solutions. so net, net the the revenue there, they did 86 million. the same quarter last year, it is a hundred and fifty 1 million dollars in this year's quarter. guy, huge increase there, 75%. and then, unfortunately, the loss to get bigger. though this, the same quarter last year, they lost about 8.4 million dollars. this quarter they lost over 14 million dollars. so that is expected to change next year. but as of right now, all the revenues are going up massively but the losses are getting a bit bigger. guys. so as are something and taking account when looking at this partikular year, then we go ahead and we look at the balance. you guys know I love the balance sheet here. so this company has- yeah, this company has- about almost two hundred million dollars in cash on a balance sheet. right, they have marketable securities basically means investments over around seven hundred and thirty three million. so they're a little under a billion dollars in cash and investment versus virtually no debt. guys, this company has basically no doubt on this balance sheet. that is an absolutely amazing balance sheet. absolutely amazing balance sheet. now I want to get back to the business. we see that you know the balance sheets phenomenal. the growing revenues at ext.

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3 Reasons to Buy Shopify Stock 1 Reason To Sell | Shop Stock

hey everyone, karchievester back to another video for today. so in this video, I want to discuss Shopify. three reasons why you should buy this stok. one reason why you should sell. of course, this is not a recommendation. these are just my thoughts and my reasons why I'm still extremely bullish on Shopify for the long term, but there is also this one one call it a red flag, but probably a one reason where you can put it in the category of you'd like to sell the stok now. of course, because of the current macroeconomic environment, because of all the headlights we've seen with regards to e-commerce- oh, it has peaked after covet. e-commerce is coming down. we're going into a recession. nobody is willing to spend their money anymore. online in-store shopping is growing, Etc. so stoks like Shopify- many others as well- are getting affected- the companies, of course, as well. so, because all of that in this video- especially because we had Black Friday, Cyber Monday, holiday season is starting so well. companies like Amazon, Shopify and all the other e-commerce players obviously seeing some traction. so I discuss all of that in this video. obviously, do share your thoughts- the negatives and the positives with regards to Shopify, down in the comments below. if you like this type of videos. leave it a thumbs up. if you haven't subscribed to this channel, maybe hit that subscribe button. I would really really appreciate that. and if you want to support me and this channel, do check out the link down in the description and in the pin comment to get the top 10 best stoks to buy now, or go to fullcom investor. make sure to check out all the other links in the pinned comment, some of which might actually save you some money if you're into shopping. so, first up, we have not Shopify, but Amazon that came out with this. so Amazon announced biggest holiday shopping weekend ever- not the last one year, two years, no, but ever, which is very, very important now. so they say here: customers supported small businesses this holiday shopping weekend, generating more than one billion dollars in sales for small businesses in the United States. don't remember: all the negativity with regards to Amazon is that it's crushing small businesses. right, Amazon is huge companies crushing small businesses, but, on the other hand, Amazon has probably provided more opportunities than many, many other companies out there: two small businesses to migrate online, and now, with this stat right here. well, proves a point, also with the fact that they launched by which? prime, which means that if you have an independent website, you can add that option: buy with prime. maybe it's calculated in that one billion dollar here, maybe not, I couldn't know. next up, we're going to Shopify and their Black Friday Recaps item Monday as well. so they announce here that, well, they set a record Black Friday this Cyber Monday weekend with sales of 7.5 billion dollars from independent businesses worldwide. that's a 19 increase in sales from the 6.3 billion dollars during shopify's Black Friday Cyber Monday weekend in 2021 and a 21 increase on a constant currency basis. and again, I'll make the point that, well, while the dollar is weakening currently, this will provide a Tailwind in the coming quarter. and here are some more stats for you. so Black Friday saw the highest shopping volume moment during the weekend, with Peak sales of more than 3.5 million dollars per minute at well, just past noon. 52 million customers worldwide purchase from independent Brands powered by Shopify- a 12 increase from 2021. Shoppers spent climbed across many countries, with customers globally spending around 102.10 dollars per order throughout the weekend. now, again, this goes back to my point that I made at the start. this video where people say, oh, after Kobe, people are going to spend less online e-commerce is- quote unquote- dying. well, these numbers show that this is clearly not the case. now, while this narrative was circling around, companies and stoks like Shopify obviously took a hit. that's for where the sales were made. so 73 of the sales were made on mobile devices and 27 on desktop. now, in my opinion, this is what it's good for for the stores, but it just shows that a lot of people are probably impulse buying because when you're on your phone, you can be in the bathroom and selling: Hmm, this looks nice, let's buy that now. as for cross-border orders, that represented 15 of all Global orders, and the most popular cross-border routes include Canada, United States, United States, Canada and UK United States. so maybe now I should start mentioning some positive points. that well, we'll answer the question, or the title of this video. so, first of all, why you should still be bullish on Shopify? because one e-commerce is far from dying. yes, it might be growing a bit slower than expected, but it is still growing. the consumer wants to shop online and clearly on their mobile phone. so there is that. e-commerce is still growing, will continue to grow for years and years to come. that does not mean that offline shopping is going to go away. no, people still like to go in person in those shops. second of all, specifically to Shopify, the company is built for this current generation, this current growth in e-commerce. we've seen that in the past couple of years as well. they keep adding the necessary feature for your business to grow. with time, whether it's crypto, whether it's AI capabilities, VR, AR will come as well. they have the engineers, they have the team to build those necessary tools for you to put into your website and for you to actually feel like a business owner and not needing to be a business owner and an engineering tik guy as well, because they will be dealing with all the background Words, which is what makes Shopify such a great company. now, to put all of these positivity into context, these are the numbers for the past couple of years. so, in 2019, they had 2.9 billion dollars in gmv 2020, 5.1 billion. obviously, that huge jump because of kovit. 2021: 6.3 billion. 2022: 7- 7.5 billion. so let's take 2022 and 2019 right before kovit, after kovitz, like the 200 BC before Christ. but uh, yeah, you can see the huge, huge growth here from 2.9 to 7.5 billion dollars. and why somebody messaging me right now? I don't know. and now, last thing I want to mention is obviously the negative body. one reason why you might want to sell Shopify today- and that's a pretty simple one: it's based on valuation. even though the stok is done tremendously, I believe it's down when the last year it's done 70 percent. year to date it's done 68. so basically the same, but from its all-time highs it's probably even closer to 80 percent now. if you look at valuation, even at the prices today, it is still a bit High compared to its peers or compared to other stoks and companies that were well, highly valued during covet. those have come down tremendously. with Shopify, same thing: it has come down tremendously, but it is still at a point that it is expensive. we've toked about that with Nvidia as well. it has come down tremendously, but valuation wise still expensive. does that mean that you shouldn't buy it? no, I don't think so. I think if you're thinking of it long term, I think those are still two great companies, specifically. now let's tok about Shopify. Shopify for the long term, is probably going to be a huge, huge company. now, of course, depends on the price you want to pay. you're paying today a premium, but that's because the market is giving this company a premium for a reason. that said, just because we're thinking about a company in the long term, you do want to see some results in the short term as well to justify that premium, and I believe that's what's been happening this past year with a lot, a lot of companies. so three reasons. one: e-commerce: the industry is not dying, far from it. 2. Shopify as a company keeps on growing- 2.53, let's say. it has the team, it has the management to continue to grow, continue to innovate and evolve with the market and to serve their customers, because that's the most important if you continue to gr.

Shopify Stock: Is this the BOTTOM? Why it's down! BUY MORE SHOP STOCK?

shopify stok has been in free fall, now below its pre-pandemic levels, after reporting a huge profit miss. investors have seen a nearly 50 drop in the last month and nearly 75 in the last six months. investors are wondering: is this the bottom for shopify stok? i'm going to tok about all this and more. this is your first time tuning in. my name is daniel and you're watching- unrivaled investing in no hype mission focus channel, trying to find you exceptional companies and unrivaled investments. we're going to tok about what does shopify do? why has the stok sold off so dramatikally and what do i think about the current valuation? could this potentially be the bottom? we'll tok about all these different dynamics. this is your first time tuning in. please make point of hitting that thumbs up, hit that subscribe button, so let's dive right in to understand the business. so, on a high level, shopify provides critikal functionality, critikal infrastructure for merchants of all size. you know nano to to mega merchants, and so it can be really anything from inventory and fulfillment, order management, shipping. you know helping effectively capital for merchant, providing loans, marketing analytiks- really what they started off was providing help with online. you know infrastructure for businesses and now they're rapidly growing to offering a lot of other key services, which we'll tok about in a second, but they clearly have one of the largest market shares slices of the pie. here's one chart suggesting that their share of ecommerce platform market share is over 30- largest player if you're, you know, not including amazon. so they are clearly doing well. the question is, why is everyone panicking? and so a key aspect is just the normalization of e-commerce, where you know, you can see, e-commerce has grown as a percentage of retail sales over time. you saw this huge spike as people effectively had to shop online in response to covid. now that's, you know, normalizing. and so, yes, management expects the long-term trend of e-commerce to keep growing. they did see a nice term benefit, but what you're doing here is you're you're sort of looking at a tough challenge of you grew so fast previously and now you know you still have this long-term trend, but you're just not growing as fast, and that's instead of the 110 growth they literally got last year, they only grew revenue 22 percent this year, which is still for most companies, that's still quite satisfactory, representing a two-year compound annual growth rate of 60. so this is still exceptional growth territory. investors were also disappointed to see they swung from a sizeable profit to a sizable loss, as their growth didn't keep up with their expansion of expenses investing in the business. now, one of the things that they're doing to invest in the business is have omnichannel offerings, and their offline solutions grew 80, so the volume of business offline grew 80. that was power powered by shopify's different solutions. so that suggests they are taking share with this omni-channel approach, and their e-commerce market share is definitely continuing to take share, especially as you compare it to some of the other players out there, like wix, for example. they continue to take market share, and they continue to take market share partly because they continue to invest in their value proposition, making them arguably an unrivaled value for the merchants that decide to partner with them. they're expecting to launch shop promise, which is going to help consumers find two-day and next-day delivery. so this is exactly what customers want and, ultimately, this is what merchants are going to want as well. in order to make this possible, they're acquiring a company called liver. this is going to be the largest acquisition by shopify and this is going to help merchants of all sizes remove the complexity of supply chain from port to porch and across all sales channels. so this is enabling effectively, key functionality, what merch, what customers expect and helping a clear pain point for merchants in terms of getting those next day deliveries, next day shipments. and so the question is: what's the right value for shopify? you've seen this huge drop- 75 drop. will it keep going? where's the rebound? where's the bottom? first quick plug where, if you're either struggling with this current investment environment or you want to find potential multibaggers, go to unrivaledinvestingcom. and a big thank you to all the unrivaled investing subscribers that keep this channel alive. without the unrivaled investing subscribers, there wouldn't be this channel. so if you enjoy this video, i i hope you consider checking out unrivaled investing. so, as you know, we we consider shopify. it's first important to understand that, yes, they are winning share, yes, they're growing nicely and they are reinvesting in their value proposition to, you know, to keep growing shared, to keep growing in the years ahead. but this is it's not without tough competition. amazon recently released buy with prime, where you can get next day shipping, even if it's not on the amazoncom site. so this is table stakes. effectively, you are going to be expected to deliver next day shipping. you know, if you, if you plan on competing online, these bets, the type of bets that shopify is making this acquisition of deliver these bets, this is dashed any sort of hope for near-term profitability. and when you look at a setup where you're saying, oh yeah, we, we saw your profitability last year and we're hoping this would, this would be a trend, and you go, oh, this was only because you grew really fast last year. you grew faster than you, you yourself expected. oh, that's a bummer, like we were hoping to keep keep seeing profitability and now saying, yeah, that's not going to happen. that should warrant a lower valuation. that should. you know that's a very rational response to the stok price. now the question is: you know how much is too much. you know when you're looking at this and so let's, let's dive into a hypothetikal framework for how we should consider, you know, looking at shopify stok. so as we look at this, you know currently it's around 50 billion dollar valuation. trying to figure out where should this go from here. maybe this growth this next year keep mine. they grew closer to 22 percent, you know, in the first quarter. no one really knows. they're expecting to accelerate throughout the year, but who knows how that plays out? you know, maybe it's somewhere between twenty and forty percent growth this next year. the question is, where does their long-term profitability shake out? they're currently unprofitable. now they do have fifty percent plus gross margins, so that could translate into optimized profitability long term of maybe 20, somewhere between 20 and 30 percent- unclear how that plays out. they continue to have to make these bets to compete with the large players like amazon that's offering these new services, and so even if you're not on amazoncom, you can get that, potentially that next day, or, you know, shipping option, and so you're looking at this, and so i'm. i'm looking at a company that's effectively trading at eight to nine times forward sales. this isn't dirt cheap, um, but this is a really high call, high quality business. this is, you know, winning market share. you know the top dog for, you know, helping independent merchants, and so i'm looking at this. you know, seeing 25, i'm penciling out 25 to 35 potential growth in the years ahead and an end multiple of, let's say, 20 to 30 times. i slap on a 20 tax rate as i think about it, and 20 to 30 times end multiple five years from now. you know, i try to have a reasonable range of what's the earnings multiple that you want to assume, assuming that they can even get to these profit margins, which might be, you know, a bridge too far. we'll see. and so, based on that, you're effectively penciling out 200 upside and effectively break even over the next five years if the stok stays effectively where it is, so at 387 bucks, if you have the low case scenario where they're able to achieve.

Shopify Stock Worth It? - Is Shopify a Good Investment?

shopify is an incredible service. it's awesome, an incredible company. everybody i know who uses it loves it. it couldn't be better for e-commerce. the question is: does that mean it's a good investment? not necessarily. our job here is to separate company from stok. that is a big deal. what usually happens out there is: people think great company, therefore i must own the stok and it's completely misguided. so i'm going to go through our eight pillar process. look at shopify and see what we should pay for by end of the video using our famous stok analyzer tool. if you already belong to our software, please follow along. go log in if you don't, and you love the software at the end, check out everythingmoneycom. it's less than a cup of coffee per day and it'll change your life. so let's go to shopify. very easy: tiker symbol shop. it's currently at 33 a share, guys. in the last year it hit a high of 177.. and i'm quite sure if you look at our past videos, when it was up here we probably gave some ridiculously low price. everybody probably thought there's no way it would fall. guys, this was december and it's down 80 since december. these things happen. stoks never stay up forever of the over price. that's just the way it is. so let's go analyze first pillar. well, first off, the stok is a 42 billion dollar company market cap. wise, all the shares multiplied by 33 per share total. number one: we want the five-year p? e ratio to be under 22.5. it is currently 135.. that's the next. so even after falling 80 percent, the five-year pe is still really high. the one-year pe is still 230. that's insane. pillar number two: we want the five-year return on invested capital greater than nine percent. main page of our, our software. five-year return, invested capital: one point two percent. that is an x as well. so, guys, so far we have two x's. now number three: very simple. we just want revenue growth over the last five years. so we scroll to the top, go to the income statement and five years ago revenue was 200, 760 million. last year 4.8 billion. massive growth. but again, you can overpay for growth. for those who don't believe me, go look back at the 2000 era. how many companies today that still stuck around have grown two, three, four times and their stok are still selling for less than it did 27 years ago. pillar number four: we want net income growth over the last five years. just one dollar or more. so we scrolled down on net income. they lost 42 million five years ago. last year they made 180 million check mark there. all right, so it's getting better. pillar number five: the silent killer of investing. this is something you'll never hear on any other channel. in fact, other channels will claim this is a good thing. spoiler alert: it's not. share is outstanding. we don't want the company diluting us owners by issuing more and more shares to others. to give you the example: if a company has 10 shares outstanding and you own one, you own 10 of the business. but if they issue two more shares, you still own one share, but now out of 12 shares. so you're down to 8.33 of the company. you have been diluted. this is very different than stok split. you have been diluted. that is not a good thing. so we scroll down to the bottom of the income statement. we go to the end of the sixth year, which was one, two, three, four, 902 million shares and now they have 1.26 billion. that's an x. they've diluted everybody by the extra 33 percent. that's crazy. pillar number five has to do with long-term liabilities. so we go back to the main page of our software and we look at the five-year average free cash flow labeled right here. so my goal is to buy a company that has long-term liabilities less than five times their five-year free cash flow. so the five year free cash flow is 145 multiplied by five. that's roughly 740. let's call it 725 million dollars. now, guys, this is a lot of math for you. don't worry, there's a shortcut to all this in our software. just stik around a little bit longer and i'll show you where it's at. so 725 million. so we go to the balance sheet where all liabilities are labeled. we scroll all the way to the bottom and right here, long-term liabilities- 1.36 billion. that's almost double the one we want now. this is a fast-growing company that could have a very depressed cash flow over the last five years because they keep growing. so it's not as big a concern for me, especially with 4.7 billion dollars in revenue. so i'm not as concerned about this one. pillars seven and eight have to do with the free cash flow, the business. so your first question is: i've heard free cash flow. what is it? it is cash from operations less your capital expenditures, and a company can do one of five things with that: they can buy back shares, pay dividends, pay down debt, reinvest back in themselves and make acquisitions. they can do all five, none of them, any combination they want. so we go to the cash flow statement to understand this and your uncle paul, because he loves you so dearly, makes the math easy for you by adding this in here. so cash from operations, that's your capital expenditures. they lost 30 million in free cash flow five years ago. they made 250 last year. that's a check mark and our final metric is the price. the free cash flow. we want under 22.5, just like the pe we 120.5. we want the same thing for price of free cash flow. so we take their free cash flow average or last five years, which we added here. we multiply that by 22.5. so i'm gonna do a little bit of math here: 2.9, 3.2 and 10.. so call it 3.2 billion dollars. so this will justify a 3.2 billion dollar market cap. if you remember it was 42 billion. that's an x. that's a lot, lot lower. so the shortcut i was telling you about here's our eight pillars tab right here. look at this. it does all the math for you. so you have to sit there and worry about it. but look at these big x's valuation: 40 more shares. i'm not worried about the debt as much, but a very low return on invested capital. now, does this mean i'm not gonna buy it? guys, we don't know what to do, because if i were to tell you this company's going to grow at 100 a year for the next 20 years and never issue another share and never take on more debt, i would buy this all day. but the question is, is it going to? so we created the stok analyzer tool, which is right here on the right. what this does is: every investment is the present value of all future cash flow, but we don't know the future. all we can do is make assumptions about the future. so if you're new to this channel, you've probably never heard me say that before, but i'm paul and i'm a value investor. my goal is to find companies that are selling for their less than their intrinsic value, their intrinsic value being what i think they're worth, based on their future potential. warren buffett does this, ben graham does it. our goal is to make conservative assumptions about the future and find companies that are mispriced because of the public's perception of it. a company like shopify has fallen 80 percent. it's a great start to look there. why? because if a company falls very quickly like that and that much it means people are getting disinterested in it. i want to find things that people are just interested about. so, if you like what i'm saying so far, stik along for the stok analyzer tool and also don't forget to subscribe to the channel. so i'm going to do a 10-year analysis on shopify. here's the revenue growth of the last one five and they don't have the 10-year numbers because they haven't been public that long: 40, 58. now i'm gonna put in a low 10 percent revenue growth, a middle of 15 and a high of 20.. that's still a lot of revenue growth, guys, even though it's significantly below the last five years. that's still a lot of revenue growth. profit margin: now, here on the profit margin, i'm going to ignore the last year. i'm going to focus more on the five year number, 12.9 percent. so i'm going to go 10, 15 and 20.. and the reason i'm with the 20 is, even though it wasn't showing 20 anywhere, as they get bigger and bigger, you saw their profit got higher and higher. they went from lo.