Shopify’s Net Worth: How Much Is Shopify Worth Right Now?
If you’ve shopped online more often during the coronavirus pandemic, you’re not alone. You and countless others have helped ecommerce platforms like Shopify thrive. With revenues booming, Shopify’s stock has had a great 2020, more than doubling in price.
Shopify’s business model is to provide an online platform for all types of businesses to reach more customers. While the pandemic has kept more Americans at home in front of their computers, making online shopping more likely, the Shopify business model seems poised to thrive whether or not the pandemic persists.
To see how much Shopify is worth, take a look at this snapshot of the company’s current state, along with a discussion of the company’s history, value and future outlook.
|Shopify: Company Snapshot|
|Founders||Tobias, Lutke, Scott Lake, Daniel Weinand|
How Much Is Shopify Worth Now?
Many companies and individuals have suffered during the coronavirus pandemic of 2020, but Shopify is not among them. In fact, the stay-at-home culture that has developed in 2020 has actually worked to Shopify’s advantage. Through early November, the stock had rallied over 130% in 2020 alone.
From a 52-week low of $282.08, Shopify’s share price reached a high of $1,146.91 in 2020, although it settled back down to about $940 in early November. This put the company’s market capitalization over $109.6 billion as of the same date. Market pundits use this figure to express how much a company is worth.
What Is Market Capitalization?
Market capitalization is simply the number of outstanding stock shares a company has issued times its current market price. So, for example, if a company has issued 1 million shares of stock and its share price is $50, the company has a market capitalization of $50 million. Shopify currently has about 116.4 million shares outstanding, so 116.4 million times the closing stock price of $941.72 on Nov. 3 equals about $109.6 billion.
Market cap does have its drawbacks as an evaluation method, however. For starters, market cap changes frequently, and it’s closely tied to the company’s current share price. It doesn’t take into account any of the direct financial metrics of the company, such as earnings per share, growth rate or book value.
By way of comparison, the price/earnings ratio, which is another popular valuation method, is also closely tied to a company’s market share price. The P/E ratio also relies heavily on a company’s earnings, which some investors feel is a more important determinant of a company’s valuation.
Shopify Market Cap Range
Shopify’s market cap varies from moment to moment based primarily on its share price. Although an increase in outstanding shares could also increase its market cap, that type of change occurs far less frequently than a change in share price, which can occur in less than one second. Here is Shopify’s share price range over the past 52 weeks:
Share price: $282.08-$1,146.91
As a result, Shopify’s market cap over that same period has also fluctuated in this range:
Market cap range: $32,842,285,268 – $133,533,555,717
With such a wide fluctuation in share price, Shopify’s market cap has also been extremely variable.
Calculating Shopify’s Net Worth
In its most basic form, net worth is simply a company’s assets minus its liabilities. By this metric, Shopify’s net worth as of the quarter ending July 31 was $6.17 billion.
|What Is Shopify Worth Now?|
|Share Price, 52-week range||$282.08-$1,146.91|
|Market Cap, 52-week range||$32,842,285,268 – $133,533,555,717|
|Fiscal Year 2019 Revenue||$1.578 billion|
|Fiscal Year 2019 Profit||$865.6 million|
|GOBankingRates’ Evaluation of Shopify Net Worth||$3,187,535,000|
Of course, methods of determining the value of a company are wide and varied, each with its own merits and blind spots.
GOBankingRates uses company data to calculate net worth in a slightly different manner. The GOBankingRates company net worth is a calculation of a company’s worth based solely on concrete, measurable figures like assets and revenue. It’s a more conservative valuation than most, taking into account only full-year profits and revenue from the last three years and the company’s assets and debts.
By this GOBankingRates metric, Shopify’s net worth is currently $3,187,535,000.
Key Product Lines Contributing To Revenue
Shopify’s core business is offering an e-commerce platform to businesses of all sizes. Whether you are an online seller, a brick-and-mortar business, a startup or a long-established business, you can use Shopify as an online outlet for your products.
Shopify’s business generates revenue from two primary sources: subscription solutions and merchant solutions. As the name implies, the Subscription Solutions division generates revenue from recurring subscriptions to the Shopify platform, in addition to the sale of custom themes, apps and domain name registrations.
The Merchant Solutions division generates revenue from subscriptions to various business services, including accepting payments and shipping and fulfillment, among others.
Here are some of the earnings highlights from Shopify’s third quarter for fiscal year 2020, ending Sept. 30:
- Total revenue for the quarter jumped 96%, to $767.4 million
- Adjusted gross profit grew 87%, to $405.1 million
- Merchant Solutions revenue growth increased 132%, while Subscription Solutions revenue grew 48%
For the company’s most recent year end, Dec. 31, 2019, the company reported annual revenue of $1.578 billion.
Founder: Tobias Lutke
Although Tobias Lutke shares co-founder status with Scott Lake and Daniel Weinand, Lutke currently helms the company as its CEO.
Lutke was born in Germany, where he learned coding by the age of 12 and entered a computer programming apprenticeship at age 16.
The Shopify founder’s net worth is $8.8 billion, according to Forbes.
Current Top Shareholders
The top 10 shareholders of Shopify stock are all asset managers/mutual fund companies. As a group, institutional and mutual fund shareholders own 65.96% of all Shopify shares. Here’s what the top shareholders list looks like:
Shopify’s Top 10 Shareholders
- Fidelity Management & Research, 7.39% of shares
- Capital Research & Management, 5.40% of shares
- Baillie Gifford & Co., 5.29% of shares
- Morgan Stanley Investment Management, 4.21% of shares
- Jennison Associates LLC, 3.01% of shares
- WCM Investment Management LLC, 2.99% of shares
- The Vanguard Group, Inc., 2.60% of shares
- Fidelity (Canada) Asset Management, 2.00% of shares
- T. Rowe Price Associates, Inc., 1.78% of shares
- Lone Pine Capital LLC, 1.52% of shares
Any of these shareholder percentages can change at any time, even dropping down all the way to 0%. Shopify is currently a hot stock, so these percentages may hold, but if the company’s fortunes turn sour, institutions may bail out at any time.
How Does the Future Look for Shopify?
Shopify has had a great run in 2020, as consumers staying home during the coronavirus pandemic have increasingly turned to shopping online. However, Shopify’s business model seems poised for further growth in the future.
Will It Be a Buy?
The consensus rating from 22 analysts covering Shopify stock is “buy,” and their composite price target of $1,161.06 is an impressive 19% above current levels. This means that Shopify’s best days may still be ahead of it, even after impressive gains in 2020.
The continuing coronavirus pandemic is a tailwind for Shopify’s services, and an ongoing increase in stay-at-home workers may also help the company. Even without these benefits, however, analysts seem onboard with the company’s long-term business plan.
Is Shopify Worth the Money?
Shopify has been a great bet in 2020, but it’s hard to say that a stock that has more than doubled is still “cheap.” However, analysts still have a “buy” rating on the stock, and momentum may keep pushing this stock higher. Analysts on average see the stock 19% higher from here, so there may still be some room left to run.
Share price is just one of the variables you should consider when investing in a specific stock. Your financial situation plays a large part in determining whether or not you should invest in stocks at all — let alone invest in a specific stock like Shopify.
Working with a fiduciary financial advisor is a good way to delineate your investment objectives, risk tolerance and personal financial situation to determine if investing in stocks is a good match for you.
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Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.
- U.S. Securities and Exchange Commission. "Form F-1."
- Yahoo Finance. "Shopify Inc. (SHOP) Stock Price."
- MarketWatch. "SHOP | Shopify Inc. Cl A Quarterly Balance Sheet."
- Forbes. 2020. "Tobi Lutke."
- Shopify. 2020. "What Is Shopify? How to Start Selling on Shopify."
- CNN Money. "SHOP - Shopify Inc Shareholders."
- Nasdaq. "(SHOP) Analyst Research."