Shopify Inc. (SHOP): investment thesis checklist
What a value investor writing down why they own Shopify Inc. would be relying on, read from its filings: the figures that have carried the business, the lines a reader might set on them, and the published tests it meets today. A list to write against, not a view on the company.
1. The figures the case would rest on
- Return on equity: 9.1% in FY2025; between -42.0% and 26.2% over 10 filed years, median -0.8%. Does the thesis need it to stay inside that range?
- Free cash flow yield: 1.0% in FY2025; between -0.4% and 1.1% over 3 filed years, median 1.0%. Does the thesis need it to stay inside that range?
- Gross margin: 48.1% in FY2025; between 48.1% and 56.5% over 10 filed years, median 53.2%. Does the thesis need it to stay inside that range?
- Operating margin: 12.7% in FY2025; between -20.1% and 12.7% over 10 filed years, median -7.9%. Does the thesis need it to stay inside that range?
- Revenue growth, 5-year CAGR: 31.6% in FY2025; between 31.6% and 95.3% over 9 filed years, median 64.0%. Does the thesis need it to stay inside that range?
2. What must stay true: guardrails a reader might set
Each line is drafted from Shopify Inc.'s own current figure, never from a level we think a business should clear, and replayed over its filed years. They are a reader's to keep, edit or drop.
Revenue Growth 1Y stays at or above 0%
Today 30.14%. Replayed over 9 filed years, it held in every one.
Current Ratio stays at or above 4.77x
Today 5.96x. Replayed over 10 filed years, it would have broken in 1; most recently FY2024, at 3.71x (10-K, filed 2025-02-11).
Free Cash Flow Yield stays at or above 0.69%
Today 0.86%. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
3. What would break it
- A filed year in which revenue growth 1y fell below 0%.
- A filed year in which current ratio fell below 4.77x.
- A filed year in which free cash flow yield fell below 0.69%.
4. The published tests it meets today
Of 30 tests value investors published: 0 met, 24 not met, 6 we could not complete. Counts, never a score.
What this cannot tell you
What the numbers say today, not the day one stops being true. The reasons are not written down.
An account adds
One email the night a number you wrote down breaks. Silence otherwise.
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How this is computedA computation on accounts filed with the SEC, not a recommendation and not advice. Past filings do not indicate future results. Risk disclaimer.