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Shopify Piotroski F-Score

: 4 (As of Today)
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The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Shopify has an F-score of 4 indicating the company's financial situation is typical for a stable company.

The historical rank and industry rank for Shopify's Piotroski F-Score or its related term are showing as below:

SHOP' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Med: 5   Max: 7
Current: 4

During the past 10 years, the highest Piotroski F-Score of Shopify was 7. The lowest was 2. And the median was 5.


Shopify Piotroski F-Score Historical Data

The historical data trend for Shopify's Piotroski F-Score 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
Piotroski F-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.00 5.00 3.00 6.00 5.00

Shopify Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
Piotroski F-Score 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 5.00 5.00 5.00 5.00 4.00

Competitive Comparison

For the Software - Application subindustry, Shopify's Piotroski F-Score, along with its competitors' market caps and Piotroski F-Score 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 Piotroski F-Score Distribution

For the Software industry and Technology sector, Shopify's Piotroski F-Score distribution charts can be found below:

* The bar in red indicates where Shopify's Piotroski F-Score falls into.


How is the Piotroski F-Score calculated?

* 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.

This Year (Jun22) TTM:Last Year (Jun21) TTM:
Net Income was 1148.432 + -371.311 + -1474.408 + -1203.907 = $-1,901 Mil.
Cash Flow from Operations was 41.866 + 260.458 + -53.56 + -124.167 = $125 Mil.
Revenue was 1123.74 + 1380.024 + 1203.623 + 1295.063 = $5,002 Mil.
Gross Profit was 608.909 + 692.659 + 637.637 + 655.642 = $2,595 Mil.
Average Total Assets from the begining of this year (Jun21)
to the end of this year (Jun22) was
(11955.678 + 13536.518 + 13340.172 + 11834.457 + 10747.63) / 5 = $12282.891 Mil.
Total Assets at the begining of this year (Jun21) was $11,956 Mil.
Long-Term Debt & Capital Lease Obligation was $1,167 Mil.
Total Current Assets was $7,858 Mil.
Total Current Liabilities was $703 Mil.
Net Income was 191.068 + 123.872 + 1258.445 + 879.093 = $2,452 Mil.

Revenue was 767.405 + 977.744 + 988.647 + 1119.445 = $3,853 Mil.
Gross Profit was 405.148 + 504.388 + 558.716 + 620.86 = $2,089 Mil.
Average Total Assets from the begining of last year (Jun20)
to the end of last year (Jun21) was
(5098.439 + 7462.031 + 7762.905 + 10824.888 + 11955.678) / 5 = $8620.7882 Mil.
Total Assets at the begining of last year (Jun20) was $5,098 Mil.
Long-Term Debt & Capital Lease Obligation was $1,061 Mil.
Total Current Assets was $8,460 Mil.
Total Current Liabilities was $511 Mil.

*Note: If the latest quarterly/semi-annual/annual total assets data is 0, then we will use previous quarterly/semi-annual/annual data for all the items in the balance sheet.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Shopify's current Net Income (TTM) was -1,901. ==> Negative ==> Score 0.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Shopify's current Cash Flow from Operations (TTM) was 125. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year's return on assets (1) to last year's return on assets.

Score 1 if it's higher, 0 if it's lower.

ROA (This Year)=Net Income/Total Assets (Jun21)
=-1901.194/11955.678
=-0.15902017

ROA (Last Year)=Net Income/Total Assets (Jun20)
=2452.478/5098.439
=0.48102527

Shopify's return on assets of this year was -0.15902017. Shopify's return on assets of last year was 0.48102527. ==> Last year is higher ==> Score 0.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

Shopify's current Net Income (TTM) was -1,901. Shopify's current Cash Flow from Operations (TTM) was 125. ==> 125 > -1,901 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. Change in Gearing or Leverage

Compare this year's gearing (long-term debt divided by average total assets) to last year's gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jun22)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Jun21 to Jun22
=1166.554/12282.891
=0.09497389

Gearing (Last Year: Jun21)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Jun20 to Jun21
=1060.953/8620.7882
=0.12306914

Shopify's gearing of this year was 0.09497389. Shopify's gearing of last year was 0.12306914. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. Change in Working Capital (Liquidity)

Compare this year's current ratio (current assets divided by current liabilities) to last year's current ratio.

Score 1 if this year's current ratio is higher, 0 if it's lower

Current Ratio (This Year: Jun22)=Total Current Assets/Total Current Liabilities
=7857.764/703.208
=11.17416753

Current Ratio (Last Year: Jun21)=Total Current Assets/Total Current Liabilities
=8460.166/511.083
=16.55340913

Shopify's current ratio of this year was 11.17416753. Shopify's current ratio of last year was 16.55340913. ==> Last year's current ratio is higher ==> Score 0.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Shopify's number of shares in issue this year was 1262.012. Shopify's number of shares in issue last year was 1274.751. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Question 8. Change in Gross Margin

Compare this year's gross margin (Gross Profit divided by sales) to last year's.

Score 1 if this year's gross margin is higher, 0 if it's lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=2594.847/5002.45
=0.51871523

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2089.112/3853.241
=0.54217008

Shopify's gross margin of this year was 0.51871523. Shopify's gross margin of last year was 0.54217008. ==> Last year's gross margin is higher ==> Score 0.

Question 9. Change in asset turnover

Compare this year's asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year's asset turnover ratio.

Score 1 if this year's asset turnover ratio is higher, 0 if it's lower

Asset Turnover (This Year)=Revenue/Total Assets at the Beginning of This Year (Jun21)
=5002.45/11955.678
=0.41841625

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Jun20)
=3853.241/5098.439
=0.75576878

Shopify's asset turnover of this year was 0.41841625. Shopify's asset turnover of last year was 0.75576878. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=0+1+0+1+1+0+1+0+0
=4

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Shopify has an F-score of 4 indicating the company's financial situation is typical for a stable company.

Shopify  (NYSE:SHOP) Piotroski F-Score Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Shopify Piotroski F-Score Related Terms

Thank you for viewing the detailed overview of Shopify's Piotroski F-Score 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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