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Shopify ROE %

: -52.04% (As of Jun. 2022)
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ROE % is calculated as Net Income attributable to Common Stockholders (Net Income minus dividends to participating security holders) divided by its average Total Stockholders Equity over a certain period of time. Shopify's annualized net income attributable to common stockholders for the quarter that ended in Jun. 2022 was $-4,816 Mil. Shopify's average Total Stockholders Equity over the quarter that ended in Jun. 2022 was $9,253 Mil. Therefore, Shopify's annualized ROE % for the quarter that ended in Jun. 2022 was -52.04%.

The historical rank and industry rank for Shopify's ROE % or its related term are showing as below:

SHOP' s ROE % Range Over the Past 10 Years
Min: -29.14   Med: -5.67   Max: 33.25
Current: -18.59

During the past 10 years, Shopify's highest ROE % was 33.25%. The lowest was -29.14%. And the median was -5.67%.

SHOP's ROE % is ranked worse than
72.9% of 2561 companies
in the Software industry
Industry Median: 3.07 vs SHOP: -18.59

Shopify ROE % Historical Data

The historical data trend for Shopify's ROE % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Shopify Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
ROE %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -5.67 -4.18 -4.89 6.79 33.25

Shopify Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
ROE % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 36.51 42.75 -13.20 -56.37 -52.04

Competitive Comparison

For the Software - Application subindustry, Shopify's ROE %, along with its competitors' market caps and ROE % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Shopify ROE % Distribution

For the Software industry and Technology sector, Shopify's ROE % distribution charts can be found below:

* The bar in red indicates where Shopify's ROE % falls into.



Shopify ROE % Calculation

Shopify's annualized ROE % for the fiscal year that ended in Dec. 2021 is calculated as

ROE %=Net Income attributable to Common Stockholders (A: Dec. 2021 )/( (Total Stockholders Equity (A: Dec. 2020 )+Total Stockholders Equity (A: Dec. 2021 ))/ count )
=2914.659/( (6400.723+11133.341)/ 2 )
=2914.659/8767.032
=33.25 %

Shopify's annualized ROE % for the quarter that ended in Jun. 2022 is calculated as

ROE %=Net Income attributable to Common Stockholders (Q: Jun. 2022 )/( (Total Stockholders Equity (Q: Mar. 2022 )+Total Stockholders Equity (Q: Jun. 2022 ))/ count )
=-4815.628/( (9789.595+8717.128)/ 2 )
=-4815.628/9253.3615
=-52.04 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

In the calculation of annual ROE %, the net income attributable to common stockholders of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data, the net income attributable to common stockholders data used here is four times the quarterly (Jun. 2022) net income attributable to common stockholders data. ROE % is displayed in the 30-year financial page.


Shopify  (NYSE:SHOP) ROE % Explanation

ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.

The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:

ROE %**(Q: Jun. 2022 )
=Net Income/Total Stockholders Equity
=-4815.628/9253.3615
=(Net Income / Revenue )*(Revenue / Total Assets)*(Total Assets / Total Stockholders Equity)
=(-4815.628 / 5180.252)*(5180.252 / 11291.0435)*(11291.0435 / 9253.3615)
=Net Margin %*Asset Turnover*Equity Multiplier
=-92.96 %*0.4588*1.2202
=ROA %*Equity Multiplier
=-42.65 %*1.2202
=-52.04 %

With this breakdown, it is clear that if a company grows its Net Profit Margin, its Asset Turnover, or its Leverage, it can grow its ROE %.

The factors that affect a company's ROE % can also be illustrated with the five-step DuPont Analysis:

ROE %**(Q: Jun. 2022 )
=Net Income/Total Stockholders Equity
=-4815.628/9253.3615
=(Net Income /Pre-Tax Income) * (Pre-Tax Income/Operating Income) * (Operating Income/Revenue) * (Revenue/Total Assets) * (Total Assets/Total Stockholders Equity)
= (-4815.628 / -4793) * (-4793 / -760.832) * (-760.832 / 5180.252) * (5180.252 / 11291.0435) * (11291.0435 / 9253.3615)
= Tax Burden * Interest Burden * Operating Margin % * Asset Turnover * Equity Multiplier
= 1.0047 * 6.2997 * -14.69 % * 0.4588 * 1.2202
=-52.04 %

Note: The net income attributable to common stockholders data used here is four times the quarterly (Jun. 2022) net income attributable to common stockholders data. The Revenue data used here is four times the quarterly (Jun. 2022) revenue data. The same rule applies to Pre-Tax Income and Operating Income.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

** The ROE % used above is for Du Pont Analysis only. It is different from the defined ROE % page on our website, as here it uses Net Income instead of Net Income attributable to Common Stockholders in the calculation.


Be Aware

Net income attributable to common stockholders is used.

Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.


Shopify ROE % Related Terms

Thank you for viewing the detailed overview of Shopify's ROE % provided by GuruFocus.com. Please click on the following links to see related term pages.


Shopify Business Description

Shopify logo
Traded in Other Exchanges
Address
151 O'Connor Street, Ground Floor, Ottawa, ON, CAN, K2P2L8
Shopify offers an e-commerce platform primarily to small and midsize businesses. The firm has two segments: subscription solutions (43% of fiscal 2018 revenue) and merchant solutions (57% of fiscal 2018 revenue). The subscription solutions segment allows Shopify merchants to conduct e-commerce on a variety of platforms, including the company's website, physical stores, pop-up stores, kiosks, social networks (Facebook), and Amazon. Merchant solutions are add-on products for the platform that facilitate e-commerce and include Shopify Payments, Shopify Shipping, and Shopify Capital.

Shopify Headlines

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