It might be difficult to choose the best growth stocks in the hectic world of e-commerce. Nonetheless, Shopify (TSX:SHOP) is among the top TSX stocks long-term investors should consider. Those looking to put $1,000 to work have plenty of options in the market right now. But I think devoting that money to buy roughly 12 shares of this growth giant is a move that makes sense.
Let’s dive more into why Shopify remains a buy right now.
Dominant market position
Shopify’s status as a premier e-commerce platform provider positions the company well for growth. That is, for those who believe the secular growth tailwinds behind the e-commerce revolution are intact.
That company’s broad reach is evidenced by the fact that Shopify is now supporting millions of merchants across more than 175 nations. This is a global giant that’s providing impressive revenue numbers to back up its market share. In 2023 alone, the company made $886 billion in sales possible. Shopify earns a small slice of this pie. But for those who think the pie is only going to grow over time, that’s a lucrative position to be in.
Shopify’s platform provides unmatched personalization for online businesses with its extensive theme store and more than 13,000 applications, enabling merchants to easily customize their online presence to meet their unique demands.
Strong financial performance
Shopify’s top- and bottom-line position are increasingly important to fundamentals-oriented investors. That’s largely because Shopify has moved out of its early-stage hypergrowth phase into a more mature and profit-oriented entity.
In this regard, I think Shopify is taking the right steps forward. The company’s revenue surged 25% year over year in the last quarter of 2023. This was driven by strong performance from its subscription services segment, which surged 31% over the same timeframe.
However, the company’s bottom-line earnings are growing even faster. As margins expand alongside market share, that’s a mix for massive bottom-up growth. That’s the kind of growth investors should be after right now.
Can this trend continue?
Now, the question is whether this recent momentum can be maintained. I think the answer is, yes.
Shopify’s overall model is about making it easier for bricks-and-mortar retailers to have an online presence. In the future, I think this is only going to become more important.
For those looking to take a truly long-term view of the market, Shopify remains a stock I think needs to be bought on any significant dips. I think this stock’s recent dip is another buying opportunity viewing the market through this lens.
