Shopify (TSX:SHOP) stock seems to continue to be one of the top choices among investors to buy, but also one of the top choices to sell. The tech stock has seen a rise and fall like no other over the last few years. And it’s made many wonder if that’s set to happen again.
It seems that a three-digit share price is hard to stick to, with shares of Shopify stock reaching $100 per share and fluttering to and fro over the last month or so.
So, with that in mind, is Shopify stock a buy? Let’s look at what the company and analysts have to say.
Focus
Shopify stock during the last year made a big move when it decided to focus back on its e-commerce roots. The company stated it would be selling off its logistics business to Flexport for a 13% stake in the company. Further, it stated that it would make large staff reductions.
This was all to get it closer to profitability and invest back in the main focus of the company. That focus is to create the best e-commerce platform, using all profits to fulfill that goal. This was certainly reiterated during its recent Investor Day — the first since 2019.
Analysts were upbeat about the focus provided by the company, and it certainly helped that it seems to be working. After all, Shopify stock achieved record results during Black Friday weekend. And now, we’re waiting for the holiday shopping season to come to an end and for further results to start off the new year. But is it enough?
Betting big on small and medium businesses
Shopify stock continues to see more and more merchants come in as it focuses on a strong and simple e-commerce solution. We’re not looking for companies that need a lot of management. Instead, these are the everyday locations that need great websites to increase their funds.
Shopify stock has bet large on this, with small- and medium-sized businesses being its bread and butter. In fact, it’s helped bring many companies from small or medium to large clients. Now, the company has established a strong narrow moat, allowing businesses that can’t afford high-costing companies to achieve strong results.
Shopify stock should continue to see more merchants added as it continues this strong reputation. Meanwhile, it also continues to add features for its clients — everything from capital, shipping and payments will drive more growth in the short and medium term. In the longer term, scale will certainly help the company grow further.
More to come
While Shopify stock has certainly maintained a focus on small- and medium-sized businesses, huge companies have also tapped the company. Shopify Plus allows online stores to remain on Shopify, even as they become enormous. So, just because you get big doesn’t mean you’ll need to go elsewhere.
Overall, Shopify stock might do quite well in the coming year. Sure, the market remains a volatile place. But even in that volatile market, the company has been so strong, seeing shares rise a whopping 113% year to date at the time of writing.
When consumers have cash back in their pockets once more, it’s clear Shopify stock will be one of the major beneficiaries. And the more it grows, the higher its share price. So, is Shopify stock a buy at these levels? I’d give it a big thumbs-up at this point.
