GURUFOCUS.COM » STOCK LIST » Technology » Software » Shopify Inc (NYSE:SHOP) » Definitions » Return-on-Tangible-Equity

Shopify (Shopify) Return-on-Tangible-Equity : -12.81% (As of Mar. 2024)


View and export this data going back to 2015. Start your Free Trial

What is Shopify Return-on-Tangible-Equity?

Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Shopify's annualized net income for the quarter that ended in Mar. 2024 was $-1,092 Mil. Shopify's average shareholder tangible equity for the quarter that ended in Mar. 2024 was $8,526 Mil. Therefore, Shopify's annualized Return-on-Tangible-Equity for the quarter that ended in Mar. 2024 was -12.81%.

The historical rank and industry rank for Shopify's Return-on-Tangible-Equity or its related term are showing as below:

SHOP' s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: -41.56   Med: -5.7   Max: 35.13
Current: -2.74

During the past 12 years, Shopify's highest Return-on-Tangible-Equity was 35.13%. The lowest was -41.56%. And the median was -5.70%.

SHOP's Return-on-Tangible-Equity is ranked worse than
66.71% of 2379 companies
in the Software industry
Industry Median: 7.82 vs SHOP: -2.74

Shopify Return-on-Tangible-Equity Historical Data

The historical data trend for Shopify's Return-on-Tangible-Equity 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 Return-on-Tangible-Equity Chart

Shopify Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Return-on-Tangible-Equity
Get a 7-Day Free Trial Premium Member Only Premium Member Only -5.47 7.53 35.13 -41.56 1.81

Shopify Quarterly Data
Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24
Return-on-Tangible-Equity Get a 7-Day Free Trial 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 4.45 -79.27 38.72 31.98 -12.81

Competitive Comparison of Shopify's Return-on-Tangible-Equity

For the Software - Application subindustry, Shopify's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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's Return-on-Tangible-Equity Distribution in the Software Industry

For the Software industry and Technology sector, Shopify's Return-on-Tangible-Equity distribution charts can be found below:

* The bar in red indicates where Shopify's Return-on-Tangible-Equity falls into.



Shopify Return-on-Tangible-Equity Calculation

Shopify's annualized Return-on-Tangible-Equity for the fiscal year that ended in Dec. 2023 is calculated as

Return-on-Tangible-Equity=Net Income/( (Total Tangible Equity+Total Tangible Equity)/ count )
(A: Dec. 2023 )  (A: Dec. 2022 )(A: Dec. 2023 )
=Net Income/( (Total Stockholders Equity - Intangible Assets+Total Stockholders Equity - Intangible Assets )/ count )
(A: Dec. 2023 )  (A: Dec. 2022 )(A: Dec. 2023 )
=132/( (6013+8610 )/ 2 )
=132/7311.5
=1.81 %

Shopify's annualized Return-on-Tangible-Equity for the quarter that ended in Mar. 2024 is calculated as

Return-on-Tangible-Equity=Net Income/( (Total Tangible Equity+Total Tangible Equity)/ count )
(Q: Mar. 2024 )  (Q: Dec. 2023 )(Q: Mar. 2024 )
=Net Income/( (Total Stockholders Equity - Intangible Assets+Total Stockholders Equity - Intangible Assets)/ count )
(Q: Mar. 2024 )  (Q: Dec. 2023 )(Q: Mar. 2024 )
=-1092/( (8610+8441)/ 2 )
=-1092/8525.5
=-12.81 %

* 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 Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data, the net income data used here is four times the quarterly (Mar. 2024) net income data. Return-on-Tangible-Equity is displayed in the 10-year financial page.


Shopify  (NYSE:SHOP) Return-on-Tangible-Equity Explanation

Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.


Be Aware

Net Income is used.

Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity 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 Return-on-Tangible-Equitys can be extremely high.


Shopify Return-on-Tangible-Equity Related Terms

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


Shopify (Shopify) Business Description

Industry
Address
151 O'Connor Street, Ground Floor, Ottawa, ON, CAN, K2P2L8
Shopify offers an e-commerce platform primarily to small and medium-size businesses. The firm has two segments. 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. The merchant solutions segment offers add-on products for the platform that facilitate e-commerce and include Shopify Payments, Shopify Shipping, and Shopify Capital.

Shopify (Shopify) Headlines

From GuruFocus

Top 5 2nd Quarter Trades of JENNISON ASSOCIATES LLC

By GuruFocus Research GuruFocus Editor 08-02-2022

Top 5 2nd Quarter Trades of Steve Mandel

By GuruFocus Research GuruFocus Editor 08-15-2022

Henry James International Management Inc. Buys 2, Sells 3 in 3rd Quarter

By GuruFocus Research GuruFocus Editor 11-02-2022

Can Shopify Break Through the Bear Market Barricade?

By Muslim Farooque 11-29-2022

Shopify: Great Business, Horrible Price

By Jonathan Poland 02-17-2023

Egerton Capital (UK) LLP Buys 1, Sells 4 in 1st Quarter

By GuruFocus Research GuruFocus Editor 08-04-2022

Shopify Is Up Against It

By Steve Gray Booyens 07-28-2022