Shopify (TSX:SHOP)(NYSE:SHOP) is a stock that needs no introduction. The Canadian e-commerce company has been one of the fastest-growing stocks of all time, up more than 5,700% since its IPO a little over six years ago.
Even after its impressive growth during its first few years as a public company, when the pandemic hit and ended up acting as a tailwind, the company took full advantage, reporting a massive growth in its business.
So, it was no surprise that Shopify was yet again a top performer in 2020. Despite already being a large-cap stock, the company still gained nearly 200% last year.
After continuing its rally early into 2021, though, Shopify and many other tech stocks were sold off, as valuations had gotten frothy.
This selloff saw Shopify stock fall significantly. It was trading down 30% from its high at some points, offering investors an incredible opportunity.
I recommended it to investors a few times as one of the cheapest growth stocks to buy in Canada.
Now, as the stock seems to be recovering, though, and tech stocks are coming back into favour, investors could be considering Shopify as a buy.
The stock is now up 44% from its low on May 13, so let’s see if still worth an investment now at these higher prices.
Shopify stock: Is it worth a buy today?
Shopify is an incredible company and easily one of the top Canadian growth stocks of all time. The company has tonnes of potential and every reason to continue growing its business for years to come.
At some point, that growth naturally has to slow down, though, because the company is getting so big. The bigger companies get, the harder it is to keep up with the rapid growth rates.
And while I don’t believe that the end of the pandemic will see a major hit to Shopify’s business, at the same time, it’s going to probably see slower growth for now.
Shopify is definitely a stock I’d recommend investors buy for their portfolios. But I wouldn’t go out of your way to own the stock.
At this price, I’d watch Shopify stock to see any developments to its business that could make it more attractive, or I’d watch for a pullback to buy on the dip.
For years, Shopify has traded with a growth premium, and rightfully so. However, you don’t want to pay the full premium and overpay for a company that will inevitably see its growth slow over the coming years.
So, for now, here’s a top small-cap Canadian tech stock with massive growth potential to buy instead.
A top tech stock with huge growth potential
While Shopify is a stock to buy on a pullback, one top tech stock that’s worth a buy today is WELL Health Technologies (TSX:WELL).
WELL is an exciting healthcare company that owns clinics as well as several digital healthcare businesses. WELL realized early on that the Canadian healthcare industry was severely obsolete and in need of desperate innovation and disruption.
So, the company, through several high-quality acquisitions, has been working to do exactly that: improve and disrupt the Canadian healthcare industry while growing its business rapidly at the same time.
The pandemic was, of course, a major tailwind for WELL. However, just because the pandemic is slowly winding down doesn’t mean WELL doesn’t have the opportunity to continue growing for decades.
WELL has been worth a buy for some time, though, and could rally any day, just like Shopify stock did. So, I’d take a position in this top Canadian tech stock soon before you miss out on the discount altogether.
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 Daniel Da Costa owns shares of WELL Health Technologies Corp. The Motley Fool owns shares of and recommends Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.