what is the next shopify stock

less 70 percent this is the return year,to date of one of the largest company in,the entire world but with this big,discount is it a good time at the moment,to buy this business or is it only the,beginning of the Shipwreck today I'll,share with you my stuck analysis on the,largest technology company in Canada,which is Shopify with the ticker s-h-o-p,I will go in detail and make a full,fundamental analysis on this company but,I will also take a look at what is their,business model and at the end I will,share with you a price prediction of,this company to see if it is undervalued,or overvalued at the moment now let's,jump right into it Shopify is an,e-commerce platform that helps small,businesses to create and build their own,online store and those Shopify users can,sell their different products and,services to their different clients this,contains satellite in 2006 and was,created initially by the Canadian Tobias,Luke in fact the first ever website,created on Shopify was created initially,by them to sell their own snowboard and,at that time there were no other options,to different creators of website to have,the full control on their own website,nowadays this platform is used by,businesses of all sizes whether they are,selling online or in retail the Shopify,version can create their own website,online and sell on different social,media but also on different blogs and,other platforms this company went from a,small company with only about five,employees in a small coffee shop to,about more than 10 000 employees all,around the globe plus now they are,helping more than 1.75 million of,businesses all around the world to,create and customize their own online,store in tatal in 2022 Shopify Merchants,will have over 500 million buyers and as,you can see there is a great,geographical diversification with the,different online stores however the big,majority of it can be found in North,America but you might be wondering how,Shopify generate its income in fact this,Commerce platform is making the biggest,part of their money throughout their,subscription plans which can be divided,in three main plans you have the basic,plan for about 38 dollars per month,obviously this includes an online store,unlimited products and services and two,staff accounts after you have the,Shopify plan for about 99 per month,which has some slightly better features,for example you can have some lower,Shopify payments but also some higher,discount on this website and finally for,about 299 dollars per month you have the,advanced plan and of course this is the,plan that has the most feature amongst,the two other plans but if you don't,want to pay too much money and have a,great plan to sell your products you,have the beginner and the starting plan,for about seven dollars per month and,this gives you the opportunity to just,sell your different services and,products online on your different social,medias on the upper end if you are a,bigger business and that you're looking,for more and some higher volume and,other big businesses to sell to well you,could go with the Shopify plus plan that,starts at two thousand dollars per month,all of these different Services have,helped this company to generate over,four billion dollars of income since the,beginning of the year since a few years,you can see that this business has been,able to grow pretty well but in fact as,we can see with the evolution of the,e-commerce between 2014 and 2024. this,particular sector should see in the next,couple of years and exponential growth,and as being one of the current leader,in that field Shopify should have a,great place in the future but in that,case why does Shopify has lost so much,value since the last couple of months in,fact this can be explained by a bunch of,different events of course the current,market downturned since the beginning of,the year as added some pact on the value,of Shopify as we can see with the NASDAQ,that is done of more than 30 percent,since the beginning of the year however,after the massive growth of the last two,years we've seen that with the reopening,of different shops after the pandemic,this has had a dramatic and just bad,impact on this company as we can see,with the growth and the bad result of,the two first quarter of Shopify however,for the third quarter of 2022 we can see,that Shopify as a massively beat what,were the expectations for them,unfortunately as we have been able to,see throughout the two last years of,full growth this has had the impact to,boost the value of this company a little,bit too much compared to what it should,have been and with the validity that the,tech stocks have in general and that,shot if I also have this stock has been,particularly hit by the revaluation of,different tech companies on the market,and it's why this downturn on the market,has been pretty bad for them however,with all the predicted growth on the,market for the e-commerce sector this,kind of company could be super,interesting for anyone that is looking,to invest in a long-term company but now,let's see if the current valuation of,this company is more interesting after,this massive discount than a couple,months ago in terms of valuation we can,that this company worth about 53 billion,dollars at the moment with a super high,price to earnings ratio of more than 245,which is quite higher compared to the,average of the technology industry,meaning that this stock on that side is,pretty much overvalued the bad news,about this company is that they are,still not making a lot of money as we,can see by their profit and their,operating margin as well as their return,on Equity that is pretty awful however,in terms of the revenue that are,currently of about 5 billion dollars on,the last 12 months we can see that they,have been growing in the last quarter of,about 20 percent a year over year and,knowing that the interest rate are,pretty high at the moment the good news,also is that this company sit on a lot,of cash about 5 billion dollars compared,to about 1.3 billion dollars of debt but,we can also see that the risk,represented by the beta is super high,about 1.88 meaning that this stock is,almost two times more volatile compared,to the average market and we can see it,by the 52 weeks change that is of less,76 percent at the moment compared to the,market that has been down of about 17,percent as I told you earlier as you can,see here the revenue of the company has,been growing pretty well since the last,couple of years but unfortunately their,total operating expense I have also,massively increased which has had the,negative impact to really decreases the,net income of this company to a negative,number at the moment and unfortunately,we can see that with all those bad,results from this company the cash flow,from the operation are also negative,which is different compared to the three,last years where the cash flow were,positive and it also means obviously,that their free cash flow are also,negative at the moment and finally to,see what is the project value of this,campaign to see if it is under or over,value on that side I first decided by,using the Peter Lynch valuation that is,a basic formula using the future growth,of earnings per share plus the dividend,yield that you divide by the price,joining ratio and of course this is,knowing the fact that when you multiply,the p ratio with the earnings per share,you obtain your current price at the,moment knowing all of these information,we can see that on that side this stock,would be way overvalued at the moment,which is a lot link of course to the IP,ratio of this company unfortunately for,this second model since the company,isn't giving any dividend you can't use,the dividend discounted model and,finally the last Model that I've,finished since I don't have finished the,two other model yet is the discounted,cash flow model on that side you need to,First find what is your weight average,cost of capital so what is your minimal,return that you must obtain and with,this calculation I have found that the,white average cost of capital is,currently of about 11 percent after with,the estimate of the growth for the free,cash flow you can just multiply them,find your future free cash flow that are,predicted which actually give you your,Enterprise Value you add all the,different equation over here and in that,case you can see that the current price,predicted for this stock at the moment,is about 12 or 13 dollars we which would,mean that with all of these factors this,would also be an overvalued stock on,that side as you've been able to see in,this video Shopify is a quite,interesting and intriguing company that,has however lost quite a lot of momentum,since the last couple of months and,technically this company is considered,as an overvalued company with a,different fundamental analysis and the,evaluation metrics but if we take a,long-term point of view if you want to,invest in a company that is a leader in,the e-commerce sector Shopify could be a,great pick for you especially with the,people that are starting to buy more and,more online and that are using more,website to go and Shop on them Shopify,could definitely a way to go in that,field knowing that it's done of more,than 70 percent since the beginning of,the year however if you want to find,some other big potential eye growth,stocks that could be pretty interesting,for you to buy right now check out the,video that's going to be right over here,and if you're looking to learn more,about personal finance make sure to join,the family by subscribing to the channel,for only 0.0 dollars and I will see you,soon peace

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