Is Shift Technologies (SFT) Halal to invest in?
How much of Shift Technologies revenue comes from haram?
Shift Technologies provides an online marketplace for buying and selling used vehicles.
The company earns its revenue from the following segments:
Ecommerce Vehicle Revenue:
Includes revenue generated from selling used vehicles directly to consumers through the company’s website.
Other Revenue:
Includes revenue generated from commissions earned from agreement contracts with third-party financing vendors offering their services on Shift’s platform. Shift also earns loan revenue through a margin on the lender’s interest rate.
In addition, Shift earns revenue through offering purchasers of its vehicles service contracts and prepaid maintenance plans.
Wholesale Vehicle Revenue:
Includes revenue generated from auctioning vehicles that don’t meet Shift’s quality standards to list on their website.
The contributions from each of Shift’s revenue segments in their latest annual report were as follows:
An area of concern for Practical Islamic Finance is Shift’s “other revenue”, particularly revenue earned from referring customers to third-party lending vendors, which represents 3.3% of total revenue. While this percentage has not been drastically increasing in the past couple of years, investors will have to monitor this percentage closely and see if it grows as time progresses.
Practical Islamic Finance concludes:
Only a non-material portion of Shift’s revenue comes from haram.
Does Shift rely on interest to operate?
| Year-to-Date for period ended 6/30/2021 | Fiscal year ended 12/31/2020 | Fiscal year ended 12/31/2019 | |
|---|---|---|---|
| Interest Income (net) | – | – | – |
| Total Revenue | $260,854 | $195,718 | $166,235 |
| Interest Expense (net) | $2,696 | $7,646 | $3,784 |
| Total Expenses | $338,198 | $271,969 | $243,078 |
| Interest Income (net) / Revenue | – | – | – |
| Interest Expense (net) / Total Expense | 0.80% | 2.81% | 1.56% |
Practical Islamic Finance concludes:
Riba is used but not relied upon in Shift’s operations.
What is Shift Environmental, Social, and Governance (ESG) impact?
Environment
No notable environmental highlights.
Social
Shift has an average Glassdoor rating of 3.6 out of 5.0 from over 237 current and previous employees compared to a 3.3 average for all other Glassdoor rated companies.
Governance
No notable governance highlights.
Practical Islamic Finance concludes:
Shift Technologies has a net positive ESG impact.
Comfort Rating
From Shift’s business, financials, and ESG reviews, Practical Islamic Finance rates Shift’s stock as:
Comfortable to invest in from a Halal perspective.
Sources
Shift Technologies Q2 2021 10Q
Shift | Buy Used Cars Online | Home Delivery