Q: Actual profit didn't seem to be discussed after Shop's recent quarter (I believe they reported "gross" profit, and free cash flow margin, whatever that is). 5i's comment (May 8) also referred to EBITDA of 337 M. My question: how far are they from actually making money, do they have a present and future P/E (none indicated on my Stockhouse website), and when might they actually make a profit? (I'm trying to look at them the way Warren Buffet might, recognizing this isn't a value play.)
Operating expense as a percentage of revenue to be 39% to 40%;
Stock-based compensation to be $120 million; and
Free cash flow margin to be in the mid-teens, similar to the first quarter of 2025.
Operating expense as a percentage of revenue to be 39% to 40%;
Stock-based compensation to be $120 million; and
Free cash flow margin to be in the mid-teens, similar to the first quarter of 2025.
5i Research Answer:
On a 12-month basis to March 31, SHOP made $1.3B on an adjusted basis (ex special items) and $1.6B on a GAAP basis. It has been profitable since 2022. On 2026 earnings it is 84X P/E currently.