Tijmen - Software.

2024 #39: Shopify App Development, P/E Ratio & Modern Go

Learned a lot of on Shopify app development this week as I got some Shopify projects coming up.

Shopify App Development

https://shopify.dev I specifically follow the first course Developing on Shopify. They have a lot of concepts to grasp which I will quickly write down below.

First question is what your app wants to modify or extend: Shopify App Platform This is how I view it.

I wanted to learn how to build a Shopify app that where a merchant can control if a new customer can see a product, price or purchase one. My first guess would be build the admin configuration panel in Embedded App pages and the customer facing part in either the Storefront API or Theme App Extensions. Theme App Extensions provide a way of adding elements to a store. These can be App Blocks and App Embed Blocks. App Blocks provide the owner of a store a way to add some something from the app via the theme editor. App embed blocks are not added via the theme editor but inject the block in either the head or the body of the page.

Besides theme app extensions, the store can also be modified by the Storefront API or App Proxies. The Storefront API is mostly used to use Shopify as an API. For example, using Shopify as a headless store. Lastly, there is app proxies, where you can use external data on a merchants store. I’m going to learn & build the thing I mentioned above in public. Follow along here: Let’s Build: Shopify App for Approving Customers.

P/E Ratio

Was listening to the podcast Jong Beleggen and they were talking about the P/E Ratio. P/E Ratio is the price to earnings ratio. The price refers to the price for a stock option and the earnings is the earnings per share (EPS). So to give a better formula: P/E = Stock Price / EPS.

EPS is calculated by dividing the net earnings by the number of shares outstanding. For example, McDonalds is currently trading at $293,75 per share. Now we just need the EPS. McDonalds net earnings in 2023 was 8.47B. They had 718.800.000 shares outstanding. So the EPS is 8,47e9 / 718800000 = 11,78 earnings per share. This would mean their P/E ratio is around ~25 = 293 / 11,78. A high P/E ratio can indicate that the company is undervalued and a low P/E ratio can indicate that the company is overvalued. Or traders expect the company to become more profitable.

Let’s look at another example. Tesla is currently trading at $228,65 per share. They had 3.19B shares outstanding and their earnings were 15B. So to get the P/E ratio: P/E = Stock Price / EPS = 228,65 / (15/3,19) = 228,65 / 0.05 = 45,32. This means a high stock price in comparison to the profits. Knowing Tesla, you might reckon investors are willing to pay a premium because they expect the company to become more profitable.

Like a lot of metrics, the P/E ratio is not a perfect indicator. Just use it to help you decide wether or not to buy into a stock. The best indicator of a company is the product/service and the people that embody it.