Critical Survey: Amplitude (NASDAQ:AMPL) versus Shopify (NYSE:SHOP)

Amplitude (NASDAQ:AMPL) and Shopify (NYSE:SHOP) are both business services companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, risk, valuation, institutional ownership, earnings and profitability.

Risk and Volatility

Amplitude has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500. Comparatively, Shopify has a beta of 2.22, meaning that its stock price is 122% more volatile than the S&P 500.

Profitability

This table compares Amplitude and Shopify’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amplitude	-32.71%	-27.73%	-18.78%
Shopify	1.87%	4.48%	3.52%

Earnings and Valuation

This table compares Amplitude and Shopify’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amplitude	$276.28 million	4.31	-$90.36 million	($0.78)	-12.68
Shopify	$7.06 billion	13.58	$132.00 million	$0.09	828.20

Shopify has higher revenue and earnings than Amplitude. Amplitude is trading at a lower price-to-earnings ratio than Shopify, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

73.2% of Amplitude shares are held by institutional investors. Comparatively, 69.3% of Shopify shares are held by institutional investors. 28.7% of Amplitude shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Amplitude and Shopify, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amplitude	1	5	0	0	1.83
Shopify	3	18	15	0	2.33

Amplitude currently has a consensus price target of $11.50, suggesting a potential upside of 16.51%. Shopify has a consensus price target of $78.30, suggesting a potential upside of 5.78%. Given Amplitude’s higher probable upside, research analysts plainly believe Amplitude is more favorable than Shopify.

Summary

Shopify beats Amplitude on 11 of the 14 factors compared between the two stocks.

About Amplitude

Amplitude, Inc., together with its subsidiaries, provides a digital analytics platform that analyzes customer behavior in the United States and internationally. It offers Amplitude Analytics, which provides real-time product data and reconstructed user visits; Amplitude Experiment, a solution that allows teams to test new capabilities and safely roll out new features; Amplitude CDP, an insight-driven solution that encompasses the data infrastructure, audience management, and data streaming capabilities; and Amplitude Session Replay used by product, marketing, and data teams to understand user behavior, diagnose product issues, and improve product outcomes. The company also provides customer support services related to initial implementation setup, ongoing support, and application training. It delivers its application over the Internet as a subscription service using a software-as-a-service model. The company was formerly known as Sonalight, Inc. and changed its name to Amplitude, Inc. in December 2014. Amplitude, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.

About Shopify

Shopify Inc., a commerce company, provides a commerce platform and services in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, Australia, China, and Latin America. The company's platform enables merchants to displays, manages, markets, and sells its products through various sales channels, including web and mobile storefronts, physical retail locations, pop-up shops, social media storefronts, native mobile apps, buy buttons, and marketplaces; and enables to manage products and inventory, process orders and payments, fulfill and ship orders, new buyers and build customer relationships, source products, leverage analytics and reporting, manage cash, payments and transactions, and access financing. It also sells custom themes and apps, and registration of domain names; and merchant solutions, which include accepting payments, shipping, and securing working capital. The company was formerly known as Jaded Pixel Technologies Inc. and changed its name to Shopify Inc. in November 2011. Shopify Inc. was incorporated in 2004 and is headquartered in Ottawa, Canada.