Shopify $SHOP DCF Valuation $632 Price Target with 38% Upside

I posted an earlier valuation model where there was a typo in the shares outstanding lol, so here's the updated model. Honestly, personally, I will probably buy a few shares before the earnings call, and either average down or up after the call; depending on how that goes LOOL. Biggest assumptions of the model: Both subscription and merchant solution revenue streams are expected to grow at 90% of the last 6 years' average and decline linearly to half of that by 2028. A 20x EV/EBITDA multiple is used for the terminal value; this is actually very conservative if Shopify continues to grow. However, very alarming if they show signs of decay. Shopify is currently trading at 14.8X EV/EBITDA, which is just above average for the Software industry. Big Caveat If Shopify falters even as much as a gentle breeze (softer than your wife's bf's farts) in growth numbers in the upcoming earnings report, it might plummet to $69.42 LOL Any and all feedback and questions are welcome. Appendix I am an ape...What's a Discounted Cash Flow (DCF) model? Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based on its expected future cash flows. DCF analysis attempts to figure out the value of an investment today, based on projections of how much money it will generate in the future. For absolute apes: It's basically what the "pros" like Investment Banks, Hedge Funds, Asset Managers, etc. use to determine the "true"/"intrinsic" value of an asset/stock/company. Disclaimer: This is not financial advice. I am not telling you to buy or sell or do anything with the Shopify stock. This is simply my analysis meant for educational purposes and nothing else. ​ https://preview.redd.it/np6qsh6y90x81.png?width=2284&format=png&auto=webp&s=d564174cf4a6ef890e6201a9ca205cce15de6e0b

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Shopify $SHOP DCF Valuation $632 Price Target with 38% Upside

May 2, 2022

bullish

general Analysis

[1 min Read]

I posted an earlier valuation model where there was a typo in the shares outstanding lol, so here's the updated model.

Honestly, personally, I will probably buy a few shares before the earnings call, and either average down or up after the call; depending on how that goes LOOL.

Biggest assumptions of the model:

  • Both subscription and merchant solution revenue streams are expected to grow at 90% of the last 6 years' average and decline linearly to half of that by 2028.
  • A 20x EV/EBITDA multiple is used for the terminal value; this is actually very conservative if Shopify continues to grow. However, very alarming if they show signs of decay. Shopify is currently trading at 14.8X EV/EBITDA, which is just above average for the Software industry.

Big Caveat

If Shopify falters even as much as a gentle breeze (softer than your wife's bf's farts) in growth numbers in the upcoming earnings report, it might plummet to $69.42 LOL

Any and all feedback and questions are welcome.

Appendix

I am an ape...What's a Discounted Cash Flow (DCF) model?

Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based on its expected future cash flows. DCF analysis attempts to figure out the value of an investment today, based on projections of how much money it will generate in the future.

For absolute apes:

It's basically what the "pros" like Investment Banks, Hedge Funds, Asset Managers, etc. use to determine the "true"/"intrinsic" value of an asset/stock/company.

Disclaimer: This is not financial advice. I am not telling you to buy or sell or do anything with the Shopify stock. This is simply my analysis meant for educational purposes and nothing else.



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SHOP

Shopify Inc.

31.32

-0.09
-0.29%

Return

-92.64%
Change % Since Posting
-394.17
Change Since Posting
425.49
Price When Posted

Metrics

632.00
Target Price
9/ 10
Confidence
6-12 Months
Timeframe
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Earnings Release
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News
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SEC
Filing
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Sentiment
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