Is it Too Late to Buy Shopify Stock?

Shopify is one of the most popular stocks on the market. Is it too late to buy shares?

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Shopify (TSX:SHOP) may very well be one of the most well-known stocks among investors. This company has seen its fair share of highs and lows since its initial public offering in 2015.

In terms of highs, Shopify stock saw major gains from 2015 to 2021. In the 2020 edition of the TSX30, which is a publication highlighting the top 30 stocks in Canada over the past three years, Shopify ranked in first place. In fact, the company was so successful over that period that Shopify stock’s performance nearly totaled the combined performance of the next three highest-ranking stocks.

In terms of its lows, Shopify couldn’t stay out of the spotlight when the company announced that it would be laying off more than 10% of its workforce.

With all of that said, is today a good time to buy shares in Shopify stock? Or is it too late? I firmly believe that it’s an excellent day to buy Shopify stock. In this article, I’ll tell you why.

The argument for Shopify stock

The reason I believe Shopify stock could be a great buy today is because of its positioning within the rapidly growing e-commerce industry. It has previously been projected that the global e-commerce industry could grow at a compound annual growth rate (CAGR) of 14.7% from 2020 to 2027. If that happens, the industry leaders could see massive growth in their respective businesses. In terms of market share, there’s no denying that Shopify is a leader. It holds a 10% share of the American e-commerce industry.

For further support that Shopify’s business is in as good a spot as ever, investors simply need to turn to its latest earnings presentation. There, the company reported a 26% year-over-year growth in its fourth-quarter (Q4) revenue. That revenue growth comes, despite a tightening in consumer spending through 2022. In addition, Shopify’s monthly recurring revenue (MRR) continues to be strong. Since 2017, Shopify’s MRR has grown at a CAGR of 30%.

Finally, this company continues to innovate. Investors shouldn’t ignore the fact that Shopify has managed to establish a very formidable enterprise partnership network. By giving its merchants access to the likes to Meta Platforms, Walmart, Spotify, YouTube, and more, Shopify merchants can sell their products to consumers easier than ever before. Shopify is also one of the first to act when incorporating new technologies to its platform, like supporting cryptocurrency transactions.

Foolish takeaway

Shopify is a very popular stock among investors and with good reason. This growth stock has managed to become one of Canada’s largest companies, cementing its place among other blue-chip stocks. Despite the past growth and difficult times this stock has experienced, I believe investors could still get a lot out of this stock. Shopify continues to lead a rapidly growing industry. Is it too late to Buy Shopify stock? In my opinion, it isn’t. Investors should jump on this stock today.

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.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Fool contributor Jed Lloren has positions in Shopify and Spotify Technology. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Meta Platforms, Spotify Technology, and Walmart. The Motley Fool has a disclosure policy.

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