Software - Application · NASDAQ
Current Price
$121.26
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Shopify Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Shopify Inc., a commerce company, provides a commerce platform and services in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company's platform enables merchants to displays, manages, markets, and sells its products through various sales channels, including web and mobile storefronts, physical retail locations, pop-up shops, social media storefronts, native mobile apps, buy buttons, and marketplaces; and enables to manage products and inventory, process orders and payments, fulfill and ship orders, new buyers and build customer relationships, source products, leverage analytics and reporting, manage cash, payments and transactions, and access financing. It also sells custom themes and apps, and registration of domain names; and merchant solutions, which include accepting payments, shipping and fulfillment, and securing working capital. The company was formerly known as Jaded Pixel Technologies Inc. and changed its name to Shopify Inc. in November 2011. Shopify Inc. was incorporated in 2004 and is headquartered in Ottawa, Canada.
ROIC (TTM)
8.7%
ROE (TTM)
10.0%
FCF Yield
1.28%
Based on trailing twelve-month data, SHOP shows a free cash flow per share of N/A and a ROIC of 8.7%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 1.28% are important context metrics when evaluating SHOP's stock valuation relative to peers.
The intrinsic value of SHOP depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether SHOP is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $121.26. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Shopify Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Software - Application industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting SHOP's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Shopify Inc., this means projecting how much free cash flow the Software - Application will produce over the next 5-10 years, then discounting those amounts to today's dollars. SHOP's ROIC of 8.7% shows moderate capital returns.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For SHOP, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
