Should You Buy Shopify While it’s Below $100?

Here’s why Shopify (TSX:SHOP) remains a top long-term growth stock investors should consider buying below the key $100 level.

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Given the current scenario of the Canadian stock market, investors seek stocks that can offer them the best market-beating returns. Nevertheless, to do this, you must select a growth stock with strong fundamentals and long-term growth plans to outperform its competitors. One such stock on the Toronto Stock Exchange is Shopify (TSX:SHOP), which has the potential to become an absolute juggernaut in its industry over the coming years.

Here’s why I think this stock is a buy below the $100 level right now.

Strong long-term strategy

As a leading e-commerce platform provider, Shopify’s long-term growth strategy is relatively easy to understand. The company enables small- and medium-sized businesses to set up online shops, earning transaction fees on the gross merchandise value that flows through its platform. This leads to very steady cash flows, making Shopify a top software-as-a-service stock long-term investors continue to invest in for long-term growth.

Shopify’s cash flow profile has been resilient and consistent throughout recent years. This helps investors get a clear picture of the stock’s future performance. Furthermore, Shopify’s secular tailwinds continue in earnest despite its fall post-pandemic. The company’s innovative technology enables merchants to design, manage, market and sell their services and products in multiple market cycles. 

Excellent financial performance

Shopify reported a total revenue of $7.1 billion in 2023, a whopping rise of 26% from the last financial year. The company’s merchant solutions increased by 27% to $5.2 billion, and subscription solutions grew by 23% to $1.8 billion. Shopify made a gross profit of $3.5 billion in 2023, a rise of 28% from the previous year’s $2.8 billion.

The positive presence of Shopify in the market makes it one of the best stocks you must seek to invest in 2024. Furthermore, Shopify witnessed an increase of 120% in its stock price in 2023 and plans to increase it in the upcoming years. So, if you plan to invest in this company when its stock price is at $80, it will still be the best buy, as the company can deliver positive returns to its shareholders. Hence, these attractive statistics of Shopify make it one of the top-performing TSX Composite components.

Should you invest in SHOP stock while it is below $100?

The recent earnings report of Shopify showcases the strength of its overall business model. Despite its performance at the beginning of 2022, investors may look at it now through a different view. Over the past five years, Shopify Inc.’s stock price grew by 200% from where it started, providing investors with a 24% compound annual growth. Few companies on the Toronto Stock Exchange have the potential to offer dividend returns, like Shopify, in a bull market. 

Shopify has gained enormous traction in the United States, accounting for 28%, and the company plans to increase its sales by 10% annually till 2028. In the offline market, the company has taken over 2% of retail sales in North America and 0.5% globally. Nevertheless, the company has multiple sectors to explore, which will help it enhance its business and become an industry goliath.

I think the company is well-positioned to capture market share long-term, and Shopify remains a top pick of mine for growth investors thinking long term. At below $100 per share, SHOP stock certainly looks like a buy to me.

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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.

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