Q: Hi, Any insights as to why the share price of SHOP is trading at a much higher forward P/E and forward P/FCF than all of the magnificent 7 with the exception of TSLA? As of end of trading Jul 15 this is the data I have:
Compare Forward P/E with Mag 7:
TSLA 88.54
SHOP 62.2
NVDA 43.95
AMZN 40.32
MSFT 35.9
AAPL 33.86
META 24.2
GOOG 24.1
Compare Forward P/FCF with Mag 7:
TSLA 133.02
SHOP 65.22
MSFT 48.2
NVDA 50.24
AMZN 35.03
AAPL 30.43
META 27.6
GOOG 28.5
Compare Forward P/E with Mag 7:
TSLA 88.54
SHOP 62.2
NVDA 43.95
AMZN 40.32
MSFT 35.9
AAPL 33.86
META 24.2
GOOG 24.1
Compare Forward P/FCF with Mag 7:
TSLA 133.02
SHOP 65.22
MSFT 48.2
NVDA 50.24
AMZN 35.03
AAPL 30.43
META 27.6
GOOG 28.5
5i Research Answer:
SHOP is a much smaller company than the others, which implies it might be able to grow at a faster rate. It also, essentially, is in a global duopolistic position with AMZN, and it is very hard for competitors to break the market share of this duo. It has lots of cash (though some of the others do as well). It may also get a premium multiple as there are not many large cap liquid tech names available in Canada, so Canadian funds may afford it a higher multiple due to scarcity.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in AMZN.