Shopify Inc. — Earnings Quality Grade C
SHOP · Technology
Some red flags
Screening Summary
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 13 days, change +2 days YoY
AR outpaced revenue for 2 consecutive years
Revenue 30.1%, CFFO 25.8%. Cash follows revenue
Expense Quality
Inventory -19.2% vs COGS 36.1%. Normal
CapEx growth 36.8% vs revenue 30.1%. Normal
SG&A/Gross Profit = 38.4%. Normal
Gross margin 48.1%, change -2.3pp. Stable
Cash Flow Quality
CFFO/NI = 1.65. Profits backed by cash
FCF $2.0B, FCF/NI = 1.63
Accruals ratio = -5.3%. Low accruals
Cash $5.8B covers debt $0.2B
Balance Sheet Health
Goodwill+Intangibles $0.5B = 4% of equity. Manageable
Debt/EBITDA = 0.1x. Healthy
Other assets grew 85.7% vs revenue 30.1%
Write-offs normal
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles change 10% YoY. Normal
Manipulation Score
M-Score = -2.17 (grey zone)
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-08