$JEF Top picks per sector for 2026

$APP , $UBER , $SPOT , $RDDT (+0,02 %) , $ROKU , $Z , $NOW , $SHOP , $TWLO , $HUBS , $DNTH (-2,22 %) , $TSHA , $TYRA , $TNGX , $SLB , $ORIC (+0 %) , $IONQ , $QBTS , $FCX , $GLEN

Reading time: approx. 7 minutes

Many of my recent posts have dealt with various ratios that help in the valuation of companies - EV/EBITDA, free cash flow yield, debt/EBITDA, ROE vs. ROIC or, most recently, the logic of margins. The price/sales ratio (P/S ratio) fits seamlessly into this series, but is also one of the most frequently misunderstood figures. It initially appears to be a simple measure: market capitalization divided by sales. It is precisely this simplicity that makes the KUV attractive, but also dangerous. Turnover is robust, easy to measure and rarely distorted - in contrast to profits, which are strongly influenced by investments and accounting logic in the early stages. However, turnover initially says nothing about how profitable a business model can be in the long term.

The KUV is particularly valuable in business models that are still in the development phase. Companies invest heavily in sales, technology, logistics or infrastructure in order to gain market share. Profits are often negative or hardly meaningful, while turnover provides the most stable signal. This is why the P/E ratio serves as a valuation anchor as long as cash flows and profits are distorted. The logic is understandable: If profit ratios don't work, the focus shifts to the top line of the P&L. But this is exactly where the real analysis begins - because turnover alone does not create value. Only the ability to convert this turnover into profitable cash flow determines the viability of a KUV.

To read the KUV in a meaningful way, you need to understand the margin structure of a company. Gross margin is often the best leading indicator of scale. A model with an 80% gross margin generally has more potential to convert sales into operating income than a model with a 25% gross margin. Software, platform models and payment architectures are good examples of this. They can carry high KUVs because the basic logic - high contribution margins, low marginal costs, strong scaling - leads to attractive margins in the long term. Companies from industry, trade or cyclical sectors are naturally significantly lower because the value added per euro of sales is lower. A KUV of 10× can be rational for a software model - it would be excessive for a consumer producer.

The Rule of 40 - sales growth plus operating margin - helps to classify this profitability journey. Companies with high growth rates but permanently negative operating margins have to show at some point that economies of scale actually work. Models that sustainably exceed the Rule of 40 can justify high P/E ratios, while companies below 20 hardly provide a basis for ambitious multiples. Added to this is capital efficiency: ROIC is the common thread that shows whether the business really generates value. Even a high P/E ratio can seem reasonable if a company is demonstrably able to generate an above-average return on invested capital.

The capital structure is just as important. The KUV ignores debt. A company with a KUV of 8 and high debt can be significantly riskier than a company with a KUV of 12 but a strong balance sheet. In phases of rising interest rates, this blind spot leads to harsh valuation reactions because high debt places a greater burden on future cash flows. In such cases, EV/Sales is often the more robust measure because it takes the actual capital structure into account.

Practical examples make these mechanics tangible. $SHOP (Shopify) showed for years how a highly scalable model with a strong gross margin can justify double-digit P/Es. The market did not pay for the present, but for the expected profitability. The same was true for $SNOW (Snowflake) with partly over 30× sales - a reflection of high gross margins, recurring revenues and strong lock-in effects. $AMZN (Amazon) used the P/E ratio as a key valuation indicator in the early 2000s because profits were hardly relevant. The true value only became apparent when AWS emerged and released enormous margins. Contrary examples such as $KRNT (-0,81 %) (Kornit Digital) show that even solid revenue growth is worth little if margins, ROIC and market position erode. In such a case, a "favorable" P/E ratio is only superficially attractive.

A look at typical valuation bands helps with classification. Valuation levels rarely arise in isolation - they are the result of sector logic, the competitive situation and the interest rate environment. A condensed overview:

SaaS & software (high scalability, 70-90% gross margin)

- typical KUV: 8-15×

- Market leader / hypergrowth: 15-25×

- Mature models: 4-8×

Platform models & fintech (network effects, lock-in, recurring revenues)

- Typical KUV: 5-12×

- Market-leading platforms: up to 15×

Semiconductor ecosystem & infrastructure software

- typical KUV: 4-10×

- with very high margin / CapEx leverage: 10-15×

Consumer goods & branded companies

- typical P/E ratio: 1-3×

- Premium brands: 3-5×

Industry, mechanical engineering, automotive suppliers

- typical KUV: 0.5-2×

- Structurally strong models: up to 3×

Trade & logistics

- typical KUV: 0.2-1×

However, this overview in particular requires a classification that is neglected in many discussions: valuation bands are not static laws of nature, but snapshots across interest rate phases and market regimes. The sometimes high multiples of the last decade were created in an environment of extremely low interest rates and high liquidity. In a normal or high interest rate environment, fair valuation bands are traditionally significantly lower - especially for high-growth business models that have yet to prove their future earnings. In such phases, the market pays less for the distant future and demands visible profitability more quickly. Many of the high ranges that have stubbornly persisted in investor expectations are based on phases of euphoria, which should not be interpreted as the norm.

This perspective also explains the harsh revaluation of tech and platform companies after 2021. With rising interest rates, P/E ratios of 20× or 30× are no longer an expression of optimistic growth fantasies, but an expression of a valuation regime that is hardly transferable. A company can have the same growth, the same margin and the same market position - and still be valued half as highly because the interest rate regime is different. The P/E ratio thus reacts indirectly to the macroeconomic environment, although the ratio itself does not reflect the interest rate structure at all.

This makes it clear that the KUV is much more than a simple valuation figure. It is an indicator of the market's expectations for the future - and of the willingness to pay for this future. The real message only emerges from the interplay between margin structure, growth quality, ROIC, capital structure and interest rate environment. Turnover alone is an empty shell. Value is only created where companies can generate profitable, capital-efficient cash flow from this turnover. And it is precisely this that ultimately determines whether a high or low P/E ratio is justified.

Reading time: approx. 8-9 minutes

Margins are one of those key figures that are easily overlooked in everyday life - yet they show more clearly than many valuation ratios how a business model works. They reveal how much value a company generates and how much of it is consumed by its own organization. While the market fluctuates, margins remain a sober view of structure and efficiency.

The gross margin is the starting point. It shows how much of the turnover remains after direct costs: Materials, manufacturing, hosting, logistics. A high gross margin is usually the result of differentiation or low variable costs. A low gross margin, on the other hand, characterizes industries that work with volume or aggressive pricing.

The operating margin considers the entire organization - personnel, development, sales, marketing, administration, depreciation and amortization. It answers the question of how much of the originally created value is actually retained as operating profit. Only the interaction of both margins shows the operational reality of a business model.

The calculation is simple:

Gross margin = (sales - direct costs) / sales

Operating margin = operating profit / sales

Example:

€ 10 billion sales, € 6 billion direct costs → gross margin 40%.

If this leaves an operating profit of € 2 billion, this results in an operating margin of 20%.

The difference shows how resource-intensive the model is on a day-to-day basis.

The patterns are important:

If the gross margin falls, cost pressure or competition often increases.

If the operating margin increases, efficiency, capacity utilization or scaling improve.

If the gap increases, the model becomes more difficult to organize.

If it decreases, it becomes more mature.

Practical examples from various business models:

1. $MSFT (Microsoft)

Gross margin mostly in the range of ~68-72%, operating margin typically between 35-40%.

A consistent software model with a low cost base and high efficiency.

2. $AAPL (Apple)

Gross margin in the range of 43-46%, operating margin often around 25-30%.

The gap reflects the capital and marketing intensity of a global hardware model.

3. $AMZN (Amazon.)

Retail with gross margins of around 10-20 %; AWS well over 60 %, operating margins there mostly between 25-30 %.

An example of highly segmented margin profiles.

4. $META (Meta Platforms)

High gross margins; operating margins often in the 25-35% range, depending on the investment phase.

Digital advertising scales with very low marginal costs.

5. $TSLA (Tesla)

Gross margins used to be over 25%, recently noticeably lower; operating margin moves accordingly.

Pricing strategies, demand and costs have a direct impact.

6. $NFLX (+0,85 %) (Netflix)

Gross margin often between ~35-45 %, operating margin usually lower and dependent on content investments.

Only greater scaling creates operating leverage.

7. $ADBE (Adobe)

Gross margin regularly above 80%, operating margin typically in the 30-40% range.

A mature software model with stable efficiency.

8. $NVDA (-0,33 %) (Nvidia)

Gross margins usually well above 65-70%, driven by technological differentiation.

The gap between production costs and prices is structurally high.

9. $SHOP (Shopify)

Gross margin solid (~50 %), operating margin often low to negative.

Strong platform, but high expenses for sales, infrastructure and growth.

10. $ORCL (Oracle)

Gross margins around ~70-75% for years, operating margins often between 25-35%.

An established enterprise model with stable, recurring revenues.

Margins show how valuable a product is - and how efficiently a company uses its resources. The gross margin describes the quality of the offering, the operating margin the quality of the organization. Together, they provide a structural picture that goes beyond short-term valuation figures and reveals how sustainable a business model really is.

My path to financial freedom. My investment horizon is around 15 years.

• Monthly savings rate 2600 Euro
• 1000 Euro ETF savings plan
• 1150 Euro individual shares
• 400 Euro BTC savings plan + 20000 Euro cash still invested to reach 20 % of the portfolio
• 50 Euro P2P Go&Grow

Target weighting

30 % ETF $SP20

30 % shares

$AMD
$ASML
$SHOP
$NOW
$NU
$META
$FTNT
$ANET
$NFLX (+0,85 %)
$APP
$CRWD

20% Bitcoin $BTC (+0,27 %)

10% gold $EWG2 (-2,47 %)

5% P2P Bondora Go&Grow

5% Cash cushion $ERNX

the strategy is always individually adapted.

Yesterday I opened a long trade in the new derivatives strategy on $SHOP opened.

After the latest figures the

Shopify's share price fell. There was actually

actually nothing to complain about: in the third

quarter, sales rose by 30 percent to

percent to 2.84 billion dollars,

the transaction volume increased

increased by as much as 32 percent. The operating

margin of 16.4 percent clearly exceeded

expectations. Analysts

subsequently spoke of an

excellent quarter: DA David-

son, Benchmark and JPMorgan remained

recommendations, Morgan Stanley

Stanley raised its price target from 165 to

192 dollars.

Shopify is currently growing particularly strongly

is currently growing particularly strongly through AI-supported

tic commerce", international ex

expansion and partnerships with

PayPal, Klarna and OpenAI. For

2025, the Group expects further

sales growth in the mid to high

to high 20 percent range.

$SHOP

Shopify's business model is based on a subscription-based SaaS structure. Merchants pay monthly fees that vary depending on the scope of services and company size. This model ensures stable and predictable revenue. In addition, Shopify benefits from transaction fees and commissions that accrue from the use of in-house services such as "Shopify Payments".

Why many merchants swear by Shopify - and rarely switch again

This integrated payment processing works both online and in stationary retail. Shopify thus builds a bridge between digital and physical sales and enables merchants to seamlessly connect both sales channels.

A key competitive advantage lies in the high level of customer loyalty. Once a retailer has set up their online store on Shopify, switching to another platform involves considerable effort. This technical and organizational commitment leads to constant, recurring revenue and creates a strong revenue base for Shopify.

The business model is characterized by high profitability and scalability. As additional customers only incur low variable costs, the potential profit margins are considerable.

What a comeback

Shopify is one of the biggest comeback stories that the Börse has produced in recent years.

A price drop from USD 176 to USD 24 was followed by a picture-book rally that catapulted the share price to a new all-time high of just over USD 180.

I have highlighted the company's progress several times in articles, most recently in May at a price of USD 94:

Shopify: Das Geschäft in Europa boomt

Since then, the company has twice Quartalszahlen that are quite something.

In the second quarter of 2025, earnings of USD 0.35 per share were well above expectations of USD 0.28. With revenue of USD 2.68 billion, analysts' estimates of USD 2.54 billion were also exceeded.

For the year as a whole, this corresponds to a 31% increase in sales and a 35% jump in profits.

Free cash flow increased by 27% to USD 422 million and the FCF margin was 16%.

Cash is king

The strong performance continued in the third quarter. At USD 0.34 per share, earnings exceeded expectations of USD 0.32. With sales of USD 2.68 billion, analysts' estimates of USD 2.54 billion were also exceeded.

For the year as a whole, this corresponds to an increase in sales of 32%, although profit (non-GAAP) fell slightly.

However, Shopify's reported profit is not very meaningful anyway and can be used to paint a positive or negative picture almost at will. According to non-GAAP, the result has fallen slightly, but according to GAAP it has risen by more than 50%.

As old master Rappaport said so well: "Profit is an opinion, cash is a fact."

Free cash flow increased by 20% to USD 507 million in the third quarter and the FCF margin was 18%.

Shopify is now highly profitable and is also growing at a considerable pace - the momentum has even increased recently.

The gross merchandise value transacted via Shopify's systems rose from USD 69.7 billion to USD 92.0 billion in the last quarter.

The only problem is the valuation, as the share has already gone completely through the roof in recent months. However, if there is a major correction, this could turn out to be an opportunity

Shopify share: Chart from 05.11.2025, price: USD 160.94 - symbol: SHOP | Source: TWS

The quarterly figures led to selling pressure in yesterday's trading. If the share price now falls below USD 160, this will lead to a Verkaufssignal with possible price targets at USD 150 and USD 136-140.

A strong increase in buying interest can be expected between 120 and 130 at the latest.

If, on the other hand, there is a rapid return above USD 170, the all-time high is likely to be targeted again. Above this level, an extrapolated Kursziel at USD 200.

Source

https://www.lynxbroker.de/boerse/boerse-kurse/aktien/shopify-aktie/shopify-analyse/?a=3355991664&utm_medium=email&utm_source=newsletter&utm_campaign=newsletter-boersenblick&newsletter=true&mc-rss-cache-bypass=2025110607&goal=0_d93daae099-76c18d4143-410756260#shopify-der-wahre-marktfuhrer-im-e-commerce

$SHOP

💵 Revenue: $2.84 billion (Expected $2.75 billion) 🟢 | +32 % YoY

🏭 Operating result: $343 million (Erw. $311 million) 🟢

🛒 GMV: $92.0bn (Expected $88.9bn) 🟢 | +32% YoY

💻 MRR: $193m (erw. $195m) 🟡 | +10 % YoY

📊 Outlook (Q4 2025):

- Revenue growth: Mid to upper 20% YoY

- Gross profit growth: Low to mid 20% YoY

- Operating costs: 30-31% of sales

- Free cash flow margin: Slightly above Q3

🔹 Segment development:

📦 Subscription Solutions: $699m (+15% YoY)

💳 Merchant Solutions: $2.15bn (+38% YoY)

→ Merchant solutions now account for around 75% of total sales

💰 Profitability & margins:

- Gross profit: $1.39bn (+24% YoY)

- Free cash flow: $507m | 18% margin (9th consecutive quarter >10%)

- Gross margin: ~49 %

- Transaction & credit losses: $148m (vs. $58m YoY) due to store pay growth

- Share-based compensation (Q4 expectation): $130m

🗣️ Harley Finkelstein, President:

"We build. We deliver. We are growing. This model is running at full speed - GMV +32 %, turnover +32 %, free cash flow margin 18 %."

💬 Jeff Hoffmeister, CFO:

"An outstanding quarter - both sales growth and free cash flow margins again outperformed our strong Q2 performance."