The Motley Fool

If You’d Invested $10,000 in Shopify (TSX:SHOP) 5 Years Ago, You’d Be Rich Today

Let’s assume a scenario. Two investors named John and Kathy bought $10,000 worth Shopify (TSE:SHOP)(NYSE:SHOP) shares when the e-commerce company went public in May 2015. Both investors were pretty sure that this new stock would make them a fortune.

As expected, Shopify stock performed well and witnessed 100% growth within the first seven months. John was confident that Shopify stock couldn’t go higher than that. So, he sold the shares while bringing double his investment home.

Kathy didn’t pull out her money and wanted to hold her investment for the long term because she believed in the company. She’s one of those investors who doesn’t fiddle with portfolios every day and usually sticks with a stock for a while.

From an investment point of view, John did the right thing. It’s not a wrong move to sell a stock when it has a 100% rise. However, sometimes some stocks have explosive growth and returns that could not have been imagined.

Shopify has done precisely that in the last five years and brought riches for its long-term investors. There was no way Kathy could know where her investment was going to end up after five years.

$10,000 of Kathy’s investment after five years

Shopify stock never looked back after its IPO. It started trading at $31.25 when both investors invested $10,000 each. Now, In January 2020, it is trading at a whopping $539.03. If we calculate the return on investment for Kathy, we get a chunky six-figure number.

The $10,000 investment of an investor in Shopify has turned into $172.489.93 in five years, indicating a 1,624.90% return. No stock guru can predict such tremendous growth and return percentage.

What has gone in Shopify’s favour?

We can’t just end the discussion on how this stock wonder has gifted it’s long-term and committed partners. It is crucial to have a brief look at the reasons why Shopify stock has gone places since its IPO.

I think Shopify’s solid business plan, which now hinges at providing a retail operating system to businesses, is what makes all the difference. It has created its online retail ecosphere. From offering simple online sales channels, Shopify is helping retailers with inventory management, offline point of sales, subsidized shipping, and analytics as the operations of business grow.

It is even offering a line of credit to retailers for growing and expanding goals. This B2B model of mutual benefit is paying off well for Shopify. The platform has recorded 25.5 million purchases during Thanksgiving week. It has also recorded a 19% rise in cross-border shipping, which shows its increasing North American footprint.


All market indicators suggest that Shopify will grow in every sense this year. However, as an investor, you have to exercise caution. If 100% growth is uncommon, then a 1,500% increase is of the rarest phenomenon. So, we can’t expect it to happen again.

Nevertheless, Shopify stock is a good buy. It is currently trading at an outrageous 395 times forward P/E ratio, which increases its volatility, so exercise caution when purchasing.

5 TSX Stocks for Building Wealth After 50

BRAND NEW! For a limited time, The Motley Fool Canada is giving away an urgent new investment report outlining our 5 favourite stocks for investors over 50.

So if you’re looking to get your finances on track and you’re in or near retirement – we’ve got you covered!

You’re invited. Simply click the link below to discover all 5 shares we’re expressly recommending for INVESTORS 50 and OVER. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a brief time only.

Click Here For Your Free Report!

Fool contributor Jason Hoang has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.