Shopify Inc (TSX:SHOP)(NYSE:SHOP) was Canada’s biggest tech success of the previous decade. Rising nearly 1,900% in just five short years, the stock had a mega-successful IPO and just kept soaring from there.
This past fall, SHOP shareholders faced their first serious test of mettle, when the stock took a 30% dip over the course of a few months. However, shortly after, the company posted a strong quarterly report that sent its stock to new heights.
All of this has added up to a huge winning streak for SHOP shareholders who bought early. For those who got in on or near the IPO date, the stock has been a 10-bagger and then some. Having risen nearly 1,900% in under five years, it has turned a mere $10,000 initial investment into a truly substantial amount of money.
Here’s how much:
$186,500 is how much your SHOP shares would be worth if you’d put $10,000 in them at close on their IPO date and held to today.
If you had actually bought the IPO at its offering price, your shares would be worth roughly double that!
Again, all you would have had to invest to realize those ending sums would be $10,000 — and this took just five years!
There have been many TSX stocks over the years that have turned into 10-baggers; that is, stocks that increased 1000% or more in value. Shopify stands out as being one of the few that achieved the feat in under five years.
Some cannabis stocks have managed to do the same, but their success is less noteworthy after a year-and-a-half of falling stock prices. SHOP stands alone as the fast TSX 10-bagger that’s managed to sustain it.
The biggest IPO success in years
Shopify has been by far the most successful TSX tech IPO in the last five years–and in fact, one of the most successful tech IPOs of the 2010s, period.
Whereas Uber and Lyft have languished since their offerings, falling 6% and 47%, respectively, Shopify has continued to beat the market year after year.
Since its IPO, Shopify has outperformed all of the big FAANG stocks while utterly crushing last year’s most talked-about IPOs. If SHOP can maintain this, it will ultimately become Canada’s biggest tech success story by far.
But can it?
Whether SHOP actually can sustain this momentum remains to be seen. It’s well known that the company’s revenue growth has been slowly but surely decelerating since it went public.
On the other hand, it did post positive GAAP earnings for the first time in Q4 2019, indicating that it’s moving toward profitability. While nobody can say with any certainty how much higher SHOP has to fly, there’s no denying it’s been a wild ride.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Andrew Button 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. The Motley Fool recommends Uber Technologies.